How to Remove a Cosigner From a Student Loan?

Is it possible to remove a cosigner from a student loan? People with private student loan debt ask me this question often. (Federal student loans rarely require someone cosign for the student loan.)

My answer is always the same:

Yes, it is possible to remove a cosigner from a student loan. But it’s hard to do.

Let me explain.

There are 3 ways to remove a cosigner from a student loan:

1. get the private lender to agree to a cosigner release

2. refinance the private student loan into the name of the primary borrower

3. negotiate a student loan settlement

Unfoturnately, student loan cosigner rights don’t include suing a primary borrower to get released from the loan.

Usually, by the time the cosigner or primary borrower reaches out to me for help, they’ve already missed monthly payments or requested forbearances or deferments. Each of those things almost always disqualifies you from being eligible for a cosigner release.

Likewise, missing monthly payments results in late payments being added to your credit history, which shows up on your credit report, which lowers your credit score. And if you don’t have good credit, refinancing the loan with a new lender will be near impossible. (This is even truer for borrowers who owe tens of thousands in student loan debt.)

That leaves negotiating a student loan settlement as the only realistic option.

In the past, I’ve negotiated settlements that allowed the cosigner to be removed from the loan but kept the primary borrower on the hook for the loan balance.

Basically, I helped the cosigner buy herself off the loan.

But if you’re going to do that, you’re almost always better off negotiating a settlement for the entire student loan balance — not just a portion of the balance.

Negotiating Student Loan Settlements With: Navient |  Sallie Mae

Typically, private student loan lenders are willing to grant you a cosigner release if you’ve made the student loan payments as agreed for a period of time (usually 24 months) and have not participated in an alternative repayment option (like interest payments) during the loan term.

Basically, if you, the borrower — not the cosigner — have made XX consecutive, on-time monthly payments, and you have a qualifying credit score and solid personal finances. You should be able to get a cosigner release.

Follow these 3 steps to get a cosigner release from your lender:

1. Contact your lender and request the application

2. Gather supporting documentation and review the requirements for release

3. Apply for student loan cosigner release

#1 Contact your lender

Contact your lender or student loan servicer and ask the representative about getting a cosigner release.

Or, if you don’t like talking on the phone or get nervous talking with the student loan company, try sending one of these sample letters from the Consumer Financial Protection Bureau.

#2 Gather paperwork and review the requirements for release

There are no uniform requirements for getting a cosigner release.

In determining eligibility for granting a release application, I’ve seen lenders require you:

• make a certain number of consecutive on-time payments,

• provide proof of income

• provide proof of graduation or that you’re no longer in school

• prove your creditworthiness.

Click here to learn Here’s When Sallie Mae Student Loans are Eligible for Loan Forgiveness

#3 Apply for student loan cosigner release

After you get the program requirements and gather your supporting documentation, all that’s left is submitting your co-signer release.

You can usually apply by mail, fax, upload, or email.

After you apply, follow-up within the next week to confirm they received your application along with all supporting documentation.

As I shared above, getting your cosigner released from your loan is difficult.

If your application is denied, your workaround to getting your cosigner removed takes the form of a student loan refinance.

As I shared above, the only other option to get a consigner release is to pay off the consigned student loan with a new loan, aka student loan refinancing.

To get approved for student loan refinancing, you’ll need to meet the bank lending requirements (pass a credit check and have stable income).

The other benefit of refinancing is that it often leads to a lower interest rate and better repayment options.

When clients ask me about which bank to go with for refinancing, I tell them to look at their local credit unions and to check out credible.com. Credible is a marketplace where you can submit a loan application and get competitive offers for student loan refinancing and personal loans.

Let’s talk if you need help evaluating your options.