Erica Gellerman is a CPA, MBA, personal finance writer, and founder of The Worth Project: a weekly money newsletter you actually want to read. Her work has been featured on Forbes, Money, Business Insider, The Everygirl, The Everymom, and Lifehacker. When not writing about money, you'll find Erica exploring Europe from her temporary home base in London.
What is the Difference between a Cosigner and a Credit Reference?
Most students will not qualify for a private student loan on their own, due to a thin or nonexistent credit history. More than 90% of undergraduate private student loans require a creditworthy cosigner. The role of a cosigner can be confusing, especially for a parent who is new to student loans. Cosigners sometimes believe that they are merely giving a credit reference, to assure the lender that the student fully intends to pay back the loan. In reality, a cosigner is taking on a much more serious legal and financial obligation.