Complete Guide to Cosigning Student Loans

Facebook icon Twitter icon Print icon Email icon
Kristen Kuchar

By Kristen Kuchar

June 15, 2020

Many private student loans require borrowers to have a creditworthy cosigner. Most of the time borrowers need a cosigner for a private loan because they have no or little credit history and don’t have a steady income. 

More than 90% of undergraduate students and more than two-thirds of graduate students will need a cosigner to qualify for a private student loan. Even if they can qualify for a private student loan on their own, having a cosigner can yield a lower interest rate. 

Keep in mind that borrowers should usually pursue federal student loans first, since they come with many benefits that private loans do not. These include income-driven repayment plans, potential for loan forgiveness, subsidized loans, generous deferment periods, and a death and disability discharge.

Cosigner Basics

Most federal student loans do not require a cosigner. Federal Direct Stafford Loans do not require a credit check or cosigner. Federal Direct PLUS Loans might require an endorser, which is like a cosigner, if the borrower has an adverse credit history.

Once a student exhausts their federal student loan limits and decides to borrow a private loan, they may need a cosigner to be approved. 

A cosigner is just as responsible for that debt as the borrower. Cosigning a student loan has pro and cons:


  • Cosigning helps a borrower qualify for a private student loan to help pay for college costs or for a private student loan refinance.
  • Cosigning can get the borrower a better interest rate.


  • The cosigner is equally responsible for the debt, so if a borrower doesn’t pay, the cosigner is required to pay.
  • The cosigned loan counts as the cosigner’s loan and the borrower’s loan on credit reports. Carrying more debt means a higher debt-to-income ratio and can make getting approved for a mortgage or other credit more difficult.
  • If the borrower misses a payment it will have a negative impact on the cosigner’s credit history too. 

Cosigners should understand what it means to cosign a loan.

What Cosigners Need to Know

Cosigning a student loan is a big risk that shouldn’t be taken lightly. Here’s what you need to know: 

Cosigner Release

If you’ve cosigned a student loan, there are two options to cut ties with the debt, other than paying off the debt in full. 

First, you can apply for cosigner release, if offered by the lender. Some private student loan lenders offer cosigner release if specific requirements are met. Usually, a borrower needs to show good credit and steady income and have made a certain number of consecutive on-time payments. 

The second option is for the borrower to refinance their private student loans into a new private loan, without a cosigner. The new loan pays off the old loans, effectively releasing the cosigner from their obligation. Before refinancing, a borrower should understand the pros and cons of student loan refinancing. As always, borrowers should keep in mind that refinancing federal student loans means a loss in many benefits, including the potential for loan forgiveness, payments based on income, generous and payment pause options.

Sign up to get the latest student loan tips and news:

* indicates required

A good place to start:

See the best 529 plans, personalized for you