Student loan cosigner release occurs when a student loan lender allows the release of the cosigner of any obligation and ties to a private loan.
Cosigning a student loan impacts your credit history, and it also makes you equally responsible for the repayment of the student loan debt. If the borrower doesn’t make on-time payments, the cosigner is expected to make the payments. If a borrower misses a monthly payment, it impacts the cosigner’s credit, too.
Being a cosigner on a student loan appears on your credit report. Carrying that debt makes your debt-to-income ratio higher, which could also impact eligibility to purchase or refinance a home and qualify for credit cards and auto loans.
How to Qualify for a Cosigner Release
For these reasons, many cosigners like the idea of a student loan lender offering cosigner release. Every lender has different requirements for releasing a cosigner from a loan. These may include:
- The borrower satisfies the income and credit requirements
- The borrower makes a specific number of consecutive on-time monthly loan payments
- The borrower graduates
Once the borrower meets the stated requirements for their lender, they can submit a cosigner release application to their loan servicer to seek approval of releasing their cosigner.
Aside from seeking cosigner release, borrowers may refinance their student loans to release the cosigner. In addition, borrowers with good credit may qualify for a lower interest rate by refinancing with a private lender.
Student Loan Lenders With a Cosigner Release Option
There are some private student loan lenders that offer an option for a cosigner to eventually be released from the loan. Before applying, make sure to confirm they offer cosigner release, as terms can change.
- Citizens Bank
- College Ave
- Commerce Bank
- CU Learn with Thrivent
- Goal Structured Solutions (Ascent)
- Laurel Road
- Navy Federal Credit Union
- PNC Bank
- Sallie Mae
- SunTrust Education Loans
- Wells Fargo
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