Cosigner Release: How to Remove Cosigner From Student Loan in 3 Steps

Many students rely on their parents to cosign student loans to pay for college. Even after a student graduates and gets a full-time job, their cosigner remains on that loan—with their bank account and credit score on the line. Parents may want their name off the loan, but is it actually possible?

Below, we’ll walk you through when and how to remove a cosigner from student loans (either through a cosigner release or student loan refinance) and discuss the pros and cons.

Can you remove a cosigner from student loans?

The short answer: Yes, sometimes … but also sometimes no. You can remove a cosigner from a student loan in one of two ways, but in certain cases, neither option may be available.

Cosigner release

Most private student loans have a feature called cosigner release, which allows the cosigner to remove themselves from the loan under certain conditions.

Usually, the student must have made a certain number of consecutive on-time payments (typically at least 12), and the student must have a strong credit score and enough income to reasonably carry the loan burden on their own.

Student loan refinance

If a private loan doesn’t offer cosigner release or you don’t qualify, you can explore refinancing the student loan—with the same lender or a new one—in your name, effectively removing your cosigner from the loan.

Qualifying for a student loan refinance can be challenging without good credit and stable income. It’s also possible you could qualify for a refinance without your parents, but only at a higher interest rate. In that case, it may not be worth refinancing—unless your cosigner truly wants to be off the loan, however possible.

Should you get a cosigner release for your student loans?

Getting a cosigner release offers several benefits (mostly for cosigners) but also poses some risks (mostly for the child who will remain on the loan). Weigh these carefully as a family before moving forward.

Reasons to get a cosigner release

• Eliminate strain on family relationships: If you slip up, your cosigner is ultimately responsible for your debt. This can lead to tension, uncomfortable conversations, and even financial burdens for your cosigner—whether they’re a parent, grandparent, or other friend or relative. 
• Lower your parents’ DTI: As long as your parent or guardian remains a cosigner, your student loan counts as debt for them when lenders calculate their debt-to-income ratio (DTI). This makes it more challenging for them to get their own loans, such as home equity loans, auto loans, or a new mortgage.
• Protect your parents’ credit: If you miss a payment, it’s not only late fees you need to worry about. Late payments can damage your credit score—and your parent’s credit score, as long as they’re a cosigner.
• Feel financially independent: As a student post-graduation, you may want full financial independence—to prove to yourself that you can make it on your own. Removing a cosigner is a big step toward that feeling of self-sufficiency.

Risks of getting a cosigner release

• Tough criteria to qualify: Lenders that offer cosigner release may have strict requirements for qualifying. Often, you’ll need to have made on-time payments for several years with no slip-ups; plus, you’ll also need a steady income and a strong credit score. Getting approved can be a long shot; the latest data (admittedly old, from 2015) from the Consumer Financial Protection Bureau shows that only 10% of borrowers who apply for cosigner release are approved.
• No safety net: When you have a cosigner, you can rely on your parent or guardian to help with payments if you’re ever short on cash. Without a cosigner, no one is financially tethered to your debt—meaning you’re on your own when making payments.
• Potential for higher rates: While your interest rate likely won’t change with a true cosigner release, you could face higher interest rates if you refinance the loan to remove the cosigner.

A borrower’s ability to obtain a cosigner release depends not only on making consecutive on-time payments but also on meeting additional financial criteria. Even if they fulfill the payment requirement, they may struggle with a low credit score or unstable income, often due to economic uncertainty or a stagnant job market. Some lenders impose stricter conditions for cosigner release than for the initial loan approval. Therefore, it is crucial for borrowers to understand these requirements in advance and take proactive steps to meet them.

How to remove a cosigner from your student loans

If your loan offers an option for cosigner release, here’s how to make it happen:

1. Confirm eligibility

Find out whether you qualify. Some lenders may require as few as 12 months of on-time payments, but others may require 48 months of consecutive, on-time payments.

In addition, you’ll need a steady income, and your credit score must be strong enough to match the interest rate your cosigner helped you secure when you first took out the loan.

2. Request and submit the application

Contact your loan servicer to learn where and how to apply for the cosigner release. There is likely a form you’ll need to fill out, and you can also expect to submit required important documentation with the application, such as:

• W-2s, 1099s, pay stubs, and bank statements
• A diploma or certification proving your graduation
• Proof of citizenship or permanent residency

Once you’ve compiled all the documentation and filled out the application, you can submit it.

3. Wait for approval

While you’re waiting, anticipate a credit check, meaning you need to thaw your credit reports if you’ve frozen them. The lender will consider your credit score, debts, and income when making a decision.

You can ask your lender how long the approval process will take, but you may also be able to find this information online. If it will take multiple weeks, stay on top of payments in the meantime.

Student loan lenders that offer cosigner release

If you’re preparing to take out a private loan with a cosigner, and you know you’ll eventually want the option to remove that cosigner, prioritize finding a lender with cosigner release. Many lenders offer this option.

The table below shows student loan lenders that offer cosigner release and the length of time you’ll need to make on-time payments before you can apply. We sorted them from shortest to longest cosigner release periods.

Note that all the lenders in the table below offer private student loans, but some don’t offer student loan refinancing. Click here if you’re interested in companies you can refinance with that offer cosigner release.

What to do if your student loan lender doesn’t offer cosigner release

Not every lender offers cosigner release for private student loans, including two notable lenders: Earnest and ELFI. Parents who took out Parent PLUS Loans (a type of federal student loan) for their child’s education are even worse off: The loan is only in the parent’s name, so they’re the borrower, not the cosigner.

That said, there is an alternative to cosigner release—and it may be better than pursuing cosigner release, even if your lender allows it. You can refinance the private loan (or Parent PLUS loan), but exclusively in the child’s name.

As with a cosigner release, both the parent and child borrower must agree to this, and the student must be able to qualify for the refinance on their own (meeting all credit and income requirements).

What student loan refinance lenders offer cosigner release?

If you’re a cosigner and are open to staying on the loan for a while longer, you could allow your child to refinance the loan with a new lender that allows cosigner release.

Consider the lenders below for that option:

College Ave’s refinance repayment terms can be as short as five years (and as long as 15 years)—so if you’re willing to wait for half the term to elapse, and your child can afford the payments with a five-year term, you could potentially be removed from the loan after 30 months of consecutive on-time payments. 

If you’re ready to refinance and don’t need a cosigner, check out our list of the best student loan refinance companies. 

Reasons to refinance student loans to remove cosigner

Here are a few reasons to consider refinancing your student loan to remove a cosigner:

• Available for all loans: If your lender doesn’t offer cosigner release, you can apply for a student loan refinance with any private lender that offers refinancing. As long as you (the student) qualify on your own, the parent can be removed.
• Potential for better interest rates: If you have a strong credit score and a consistent salary, you may qualify for a lower interest rate on the refinance.
• Lower monthly payments: If your monthly payments are too high for your budget, you can refinance with a longer loan term. Spreading payments out over more years makes monthly payments more manageable.

For parents: What to do if your child won’t agree to remove you as a cosigner

If you’re a parent who cosigned a student loan, you’ll need your child’s buy-in to take you off the loan. So what do you do if you have a strained relationship with your child and they’re not making payments?

Unfortunately, this situation is quite common. My first recommendation is for parents to protect their own credit by ensuring that payments continue on time. I also encourage open communication with their child to understand any financial or behavioral obstacles they may be facing. If necessary, involving a third-party credit counselor can help facilitate a constructive action plan for both parties.

You’re on the hook for all payments. If you don’t make those monthly payments, your credit will take a big hit.

You have three options:

1. Work on your relationship with your child and hope they’ll agree to a cosigner release.
2. Make payments on behalf of your child to protect your credit score.
3. Take legal action against your child, but note that it will likely further damage your relationship.

Option 1 is ideal, but it’s also the most unlikely if your relationship is strained. To protect your credit in the short term, option 2 makes the most sense, but it may be worth speaking with a financial advisor or lawyer to explore option 3, depending on your own financial situation.

FAQ

What happens if my child misses a payment before cosigner release?

If the borrower misses a payment before applying for cosigner release, it could reset the required number of on-time payments. Most lenders require consecutive payments for eligibility, so even one late or missed payment could delay the process. Missed payments can also hurt both the borrower’s and cosigner’s credit scores, making future loan approvals more difficult.

Will removing me as a cosigner affect my child’s credit score?

Yes, removing a cosigner may affect the borrower’s credit score, but the effect depends on their overall credit profile. If you helped the borrower secure a lower interest rate when you cosigned, their credit score could take a hit if the lender adjusts the loan terms. However, if they’ve built a strong credit history, their score may remain stable or even improve over time.

Can a cosigner remove themselves from a student loan?

No, a cosigner can’t remove themselves from a student loan. The borrower must apply for cosigner release and meet the lender’s eligibility criteria The borrower can also refinance the loan in their name, effectively removing the cosigner, but this requires qualifying for a new loan independently.

Does cosigner release change the original loan terms?

No; if the lender offers cosigner release, it does not typically change the loan’s interest rate or repayment term.

What happens if the cosigner dies before being released from the loan?

If a cosigner passes away before being released, the loan terms will depend on the lender’s policy. Some lenders may require the borrower to continue payments as usual, while others might place the loan into default or require immediate repayment. Be sure to review your loan agreement to understand how your lender handles this situation.

The post Cosigner Release: How to Remove Cosigner From Student Loan in 3 Steps appeared first on LendEDU.