How to Remove a Cosigner From a Student Loan

#1 Student loan lawyer

Updated on March 2, 2024

A cosigner is often needed to get private student loans. This person is usually a parent or guardian with a solid credit history. Good credit can lead to:

  • Lower interest rates

  • Favorable loan terms

But, as a borrower, you might want to ‘release’ your cosigner. Why? You might want to:

  • Protect your cosigner’s credit

  • Stand on your own now that you have a good credit score

So, can you remove a student loan cosigner from your debt? Yes, you can.

This guide will:

  • Explain how to release your cosigner

  • Discuss refinancing and eligibility requirements

  • Help you take control of your student loan repayments

Ahead, we’ll dive deeper into how to remove a cosigner from a student loan.

Is Removing a Cosigner from a Student Loan Possible?

Can a cosigner be removed from a student loan? Yes, but it depends on your circumstances and loan terms. Here’s how you can do it:

  1. Refinance your loan: Pay off your old loan with a new one from a different lender. The new loan is in your name only. But this option requires a good credit score and a stable income.

  2. Cosigner release: After making a series of consecutive on-time payments for a period, your lender may agree to remove your cosigner. Each lender has different rules for a student loan cosigner release, so understand your lender’s terms.

What does removing a cosigner mean?

  • For the cosigner, it means less risk because they’re not liable if you default.

  • For you, it means financial independence. But be ready to manage the loan repayment alone.

Remember, federal student loans usually don’t have cosigners. If they do, the cosigner can only be removed in specific circumstances, like loan consolidation or student loan forgiveness programs.

In short, removing a cosigner requires financial maturity and a solid payment history. Know your loan terms and repayment options, make your payments on time, and maintain a good credit report. These steps will guide you toward financial independence.

What Criteria Do Lenders Use for Cosigner Release?

When evaluating a borrower for a student loan cosigner release, lenders consider several factors. A credible repayment history, income stability, and a healthy credit profile are key components.

  1. Consistent, On-Time Payments: You must have a history of making full payments on time without resorting to forbearance or deferment. This shows your capability to handle the repayment plan.

  2. Healthy Credit Score: A minimum credit score is required. This is determined by your credit history, interest payments, and credit usage. Lenders may offer options such as refinancing loans at variable interest rates depending on your credit profile.

  3. Steady Income: Proof of a stable income is crucial. Lenders need to be sure you can manage the loan. Documents like your social security number, proof of graduation, and employment details could be required during the underwriting process.

  4. Debt-to-Income Ratio: Lenders look at your debt-to-income ratio when evaluating for cosigner release or student loan refinance. This should fall within their set limits. It shows how well you manage your existing debts.

  5. U.S. Citizenship or Permanent Residency: Many lenders require you to be a U.S. citizen or a permanent resident for a cosigner release.

Disclaimer: Remember, these requirements can vary between lenders. So, speak to your loan servicer to understand their terms. Also, meeting these requirements doesn’t guarantee a cosigner release. Lenders review your overall financial situation too.

They may offer options like student loan refinancing or income-based repayment plans that fit your financial needs better. Your grace period after graduation could be the best time to explore these options.

Related: Student Loan Cosigner Rights

How Do I Remove a Cosigner from My Student Loan?

If you aim to remove a cosigner from your student loan, knowing the steps involved in the process is crucial. Let’s look at a detailed step-by-step guide on how to achieve this, focusing on the methods of refinancing, cosigner release, and loan repayment:

  1. Review Your Loan Details: Dive into your original loan agreement. Understand your loan type, amount, repayment terms, and conditions for cosigner release. Some lenders, like Sallie Mae and SoFi, may offer cosigner release after consistent on-time payments.

  2. Explore Refinancing: Consider replacing your existing loan with a new one. This step demands a strong credit score and stable income. Remember that interest rates could change with refinancing – they could be fixed or variable. Weigh this option carefully.

  3. Apply for Cosigner Release: If you’re up-to-date with payments, apply for cosigner release. This involves a credit check and requires proof of income. The goal is to show your lender that you can manage payments independently.

  4. Keep Up with Payments: Make your monthly student loan payments on time. Regular, on-time payments demonstrate responsibility and the ability to manage the loan solo. Consider setting up autopay to avoid late payments.

  5. Boost Your Credit Score: Your credit score plays a big role in refinancing and cosigner release. Be responsible with credit card usage, avoid delinquencies, and keep your debt-to-income ratio low for a healthy credit score.

  6. Seek Financial Advice: Consult a financial advisor or resources like the Consumer Financial Protection Bureau for personalized advice.

Related: Can a Cosigner Sue the Primary Borrower on a Student Loan?

Removing a cosigner isn’t a quick process. It needs careful planning, consistent repayments, and sound financial behavior. By following these steps, you can work towards becoming solely responsible for your student loan.

What are the Benefits of Taking Control of My Student Loan?

Stepping into your financial future means taking control of your student loan. While securing a cosigner might have been necessary early on, establishing financial stability enables you to release your cosigner — a powerful step forward.

  • Boost Your Credit Score: Regular, on-time student loan payments can boost your credit score. As the sole borrower, your positive payment history raises your credibility for future loans.

  • Assert Financial Independence: Cosigner release signifies your ability to manage financial obligations, bolstering your confidence.

  • Lighten Your Cosigner’s Load: Releasing your cosigner reduces potential financial risk on their end, potentially strengthening personal relationships.

  • Unlock Refinancing Opportunities: A strong credit score and full payment history can open doors to better refinancing options. You could secure lower interest rates or more favorable repayment terms.

  • Enhance Cosigner’s Borrowing Power: Without a cosigned loan, your cosigner’s debt-to-income ratio improves, empowering them in their financial pursuits.

  • Access Future Loan Opportunities: If you’re a graduate student or permanent resident, proficient loan management could lead to more loan options and financial aid opportunities.

In short, releasing your cosigner from your student loan is a strategic step toward financial control. It’s about knowing your debt, making informed decisions, and actively managing your student loan. This can lay a solid foundation for future financial decisions and nurture habits promoting long-term financial health.

Related: Does Cosigning a Student Loan Affect Buying a Home?

Bottom Line

It may seem hard to figure out your student loan debt, but letting go of a cosigner is a key step toward financial independence. This can improve your credit, give you more freedom, and open the door to new ways to get money, like a personal loan or a car loan. Still, it’s important to make well-informed choices, especially regarding monthly payments and refinancing options.

Whether you’re a college student or a seasoned borrower, my team and I are here to help. We’ll guide you through each step — from understanding loan amounts, federal loans, and income requirements to submitting a cosigner release application and deciphering tax returns or pay stubs.

Reach out to us today to pivot your student loan from a burden to an asset, transitioning from full responsibility to complete control. Let’s navigate this journey together, setting you on a path to command your personal finances.

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Can a cosigner be removed from a student loan?

Yes, a cosigner can typically be removed from a student loan under certain circumstances, such as the primary borrower demonstrating a history of on-time payments, passing a credit check, or through loan refinancing.

What are the benefits of removing a cosigner from a student loan?

Removing a cosigner from your student loan can help enhance your credit score, foster financial independence, and provide better control over your debt. It can also relieve the cosigner of the financial responsibilities tied to your loan.

How can I remove a cosigner from my student loan?

You can remove a cosigner from your student loan by applying for a cosigner release, refinancing the loan, or paying off the loan in full. Each lender has specific requirements for cosigner removal, so it’s best to consult directly with your loan servicer.

Can a student loan cosigner be released if the borrower is in school?

While some private student loan lenders may allow for cosigner release while the borrower is still in school, typically, the borrower must have graduated and demonstrated a steady history of on-time loan payments.

Is it easier to get student loan forgiveness if I have a cosigner?

Having a cosigner does not make obtaining student loan forgiveness easier. Eligibility for student loan forgiveness programs typically depends on the type of loan, your profession, and whether you’ve made a certain number of payments, among other factors.

How to Remove a Cosigner From a Parent PLUS Loan

To remove a cosigner from a Parent PLUS Loan, consider consolidating your loan into a Direct Consolidation Loan. The Education Department bypasses credit and income checks for this process. They focus solely on verifying that the borrower has loans eligible for consolidation. After successfully consolidating, the cosigner or endorser is effectively removed from the debt obligation.

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