If a student can’t qualify for a private loan on their own, a parent or relative may be asked to cosign. This means agreeing to take full financial responsibility if the borrower doesn’t pay. It’s a generous act—but one that comes with serious risks.
Before you agree, it’s important to understand what cosigning involves, what lenders expect, and how a cosigner might be removed from the loan later on.
What It Means to Cosign a Student Loan
Cosigning a student loan means you agree to share legal responsibility for the loan. If the student borrower doesn’t make payments, the lender can require you to repay it. This setup is common with private student loans, where students often don’t have the credit or income to qualify on their own.
By adding a cosigner, the student may qualify for better loan terms. But the cosigner takes on real risk—this loan appears on their credit report and affects their ability to borrow for other things.
Who Can Cosign and What Lenders Look For
Private lenders usually have strict criteria for cosigners. Here’s what they typically require:
- Legal age and U.S. residency: You must be at least 18 (or 21 in some states) and a U.S. citizen or permanent resident.
- Strong credit: Most lenders look for a high credit score and a solid credit history.
- Stable income: You’ll likely need proof of steady income to show you can cover the loan if needed.
- Social Security number: This is required to apply.
- Willingness to accept responsibility: You’ll need to sign the loan agreement and legally agree to repay if the borrower can’t.
Cosigners are often parents or close relatives, but anyone who meets the lender’s requirements can be eligible.
Risks and Responsibilities of Being a Cosigner
Cosigning a loan isn’t just a formality. It creates a legal and financial obligation that can affect your own credit and borrowing ability.
Shared Legal Responsibility
When you cosign, you agree to repay the loan if the student doesn’t. That means the lender can come after you for the full amount, including interest and fees. This responsibility lasts for the life of the loan—unless you’re formally released.
Credit and Financial Impact
Even if the borrower makes all their payments on time, the loan still shows up on your credit report. That added debt can affect your debt-to-income ratio, which lenders consider when you apply for your own credit, such as a mortgage or car loan. If the student misses payments or defaults, it can damage your credit too.
How to Remove a Cosigner from a Student Loan
If the borrower becomes financially stable, it may be possible to remove the cosigner from the loan. However, this depends on the lender and the borrower’s qualifications.
Cosigner Release Programs
Some private lenders offer a cosigner release option. Requirements vary by lender but often include:
- A specified number of consecutive on-time payments
- Proof of stable income and good credit
- Submission of a formal request for release
Below is a comparison of cosigner release requirements for several major lenders:
| Lender | On-Time Payments Required | Additional Requirements |
| Sallie Mae | 12 consecutive months | Proof of graduation, no forbearance or modified repayment in the past 12 months, satisfactory credit history |
| Discover | 24 consecutive months | Satisfactory credit history, loan must be in repayment status |
| Citizens Bank | 36 consecutive months | Proof of income, credit check, U.S. citizenship or permanent residency |
| College Ave | 24 consecutive months | Must have completed at least half of the repayment term, earn at least twice the amount of the current loan balance, pass a credit check |
Note: Requirements are subject to change; always check with your lender for the most current information.
Refinancing the Loan
If release isn’t available or is denied, refinancing may be another path. This means the borrower takes out a new loan in their name alone to pay off the original one. If approved, the cosigner is no longer responsible.
But refinancing has trade-offs, especially for federal student loans:
- Loss of federal protections: Federal loans offer benefits like income-driven repayment plans and possible loan forgiveness. Refinancing with a private lender means giving up those options.
- Qualification hurdles: The borrower needs a strong credit profile and steady income to refinance without a cosigner.
What to Consider Before Refinancing
Before choosing to refinance, the borrower should look closely at:
- Interest rates: These can vary based on credit and market conditions.
- Loan terms: A longer term may lower monthly payments but increase total interest paid.
- Federal benefits: If refinancing a federal loan, be sure the new terms are worth losing benefits like deferment or income-based repayment options.
Wrapping Up
Cosigning a student loan is a serious financial commitment. While it can help a student access the funds they need for school, it also means sharing legal responsibility for the debt—and the potential credit and financial consequences that come with it.
Before agreeing to cosign, it’s important to understand the risks, ask questions about lender policies, and explore options for removing yourself from the loan down the line.
