Applying for a private student loan with a cosigner can help you qualify for the loan and get better rates. However, your cosigner may be wary of sharing debt for years to come, as that loan could affect their chances of getting a mortgage or another type of financing in the future.
Fortunately, your student loan cosigner may qualify for removal from your loan agreement after certain conditions are met; an option called cosigner release. Ascent, Citizens, and Custom Choice are just a few examples of lenders who offer student loans with cosigner release.
Private student loans with cosigner release
To qualify for student loans with cosigner release, you typically need to:
- Prove you can pay off the loan on your own
- Make consecutive, on-time monthly payments
- Have a good credit score (about 670 or higher)
These qualifications can vary by lender. You can secure cosigner release from the following lenders.
Ascent
Ascent offers student loans between $2,001 and your school’s full cost of attendance with terms from five to 20 years.
To qualify for cosigner release from Ascent, you’ll need to:
- Make 12 consecutive, on-time payments on your loan
- Be able to qualify for a loan on your own
- Set up automatic payments on your loan
Pros
- Interest rate reduction: If you enroll in autopay, you’ll receive a discount of 0.25 percentage points.
- Rewards for graduation: Borrowers who earn their degree within five years could score a 1% cashback bonus upon graduation.
- No fees: No application, origination, or disbursement fees.
Cons
- Limited repayment options for select products: For loans without a cosigner, deferred repayment is the only repayment option while you’re enrolled.
- Specific criteria: Ascent’s “Non-Consigned Outcomes-Based Loan” is only available to juniors and seniors.
- Borrowing limit may not be enough for more expensive programs: The aggregate limit of $200,000 may not cover what you need if you’re enrolled in an expensive degree, perhaps postgraduate program.
Citizens
Citizens funds student loans starting at $1,000 and up to the total cost of attendance. You can choose terms between five and 15 years.
To qualify for cosigner release on student loans, you’ll have to:
- Make 36 consecutive, on-time payments
- Pass a credit and income check
Pros
- Interest rate reduction and loyalty discount: If you enroll in autopay, you’ll receive a discount of 0.25 percentage points as well as an additional 0.25 percentage-point loyalty discount if the borrower or cosigner already has a qualifying account with Citizens.
- No fees: No application, origination, or disbursement fees.
- Multi-year approval: You only have to apply once to possibly fund each year of college.
Cons
- Doesn’t disclose requirements: Minimum income or exact credit score requirements aren’t disclosed.
- Long path to cosigner release: Must make 36 consecutive, on-time payments to qualify.
- No prior defaults: Borrower’s must be free of any defaults on loans.
Custom Choice
Custom Choice funds student loans between $1,000 and $99,999 each year, with an aggregate limit of $180,000. You can choose a seven, 10, or 15-year terms (depending on your loan amount) and receive a 2% reduction of your principal balance when you graduate with a bachelor’s degree or higher.
Custom Choice asks for the following to qualify for cosigner release:
- Make 36 consecutive on-time payments
- Meet credit and other requirements
Pros
- Interest rate reduction: If you enroll in autopay, you’ll receive a discount of 0.25 percentage points.
- Graduation reward: Once you graduate, you’ll receive a 2% principal reduction upon graduation.
- Benefit for repeat customers: Returning the following year for another loan means you’re more likely to be approved.
Cons
- Requirements undisclosed: Theminimum income or credit score requirements are not disclosed.
- Long route to cosigner release: You must make 36 consecutive, on-time payments to gain approval.
- Not available nationwide: Loans are not available in Arizona, Iowa, or Wisconsin.
College Ave Student Loans
You can borrow up to your school’s cost of attendance from College Ave Student Loans, with a minimum loan amount of $1,000. College Ave offers repayment terms between five and 15 years for both undergraduate and graduate students.
Here are its requirements for cosigner release:
- Complete half of your repayment term (for instance, cosigner release is available after five years on a 10-year term)
- Not have any late payments on your credit report in the last 12 months or bankruptcies, foreclosures, or repossessions in the last 24 months
- Earn at least twice as much income as your current loan balance
- Be a U.S. citizen or permanent resident
Pros
- Multi-Year Peace of Mind: About 95% of undergraduate borrowers who apply with cosigners are approved for additional loans.
- Multiple in-school repayment options: College Ave allows you to make flat or interest-only payments while you’re enrolled, or you can defer repayment until you leave school.
Cons
- Eligibility requirements undisclosed: The minimum income or credit score requirements are not disclosed.
- No late payments: You must not have any late payments or other debts to qualify for cosigner release.
EDvestinU
If you borrow from EDvestinU, you can take out between $1,000 and your school’s cost of attendance with an aggregate limit of $200,000. Loan terms range from seven to 15 years. EDvestinU offers an interest rate discount of 0.50 percentage points if you sign up for autopay, twice the usual discount that lenders offer.
Its cosigner release program has these requirements:
- Make 36 consecutive on-time payments
- Have a FICO score of 749 or higher
- Make at least $30,000 per year
- Not have any defaults on education loans
- No history of foreclosures, repossessions, wage garnishments, unpaid tax liens, unpaid judgments, or other public records with an open balance greater than $100 during the last seven years
- No bankruptcies in the past 10 years
Pros
- Interest rate reduction: If you enroll in autopay, you’ll receive a discount of 0.50 percentage points.
- No fees or penalties: No application, origination, disbursement fees or prepayment penalties.
Cons
- Long road to cosigner release: You must make 36 consecutive, on-time payments to qualify.
- Good to excellent credit score required: Borrowers must have a FICO score of 749 or higher.
INvestEd
INvestEd provides loans starting at $1,001 to students who live or go to school in Indiana. Terms range from five to 15 years.
You can qualify to have your cosigner released if you:
- Make your first 48 monthly payments on time and in full
- Meet the lender’s underwriting requirements for credit and income
Pros
- Reduced interest rate: If you enroll in autopay, you’ll receive a discount of 0.25 percentage points.
- Helpful resources: College planning and financial aid resources are available for students.
Cons
- Only available for Indiana: Only students living in or attending a school in Indiana are eligible.
- Long timespan to cosigner release: You must make 48 consecutive, on-time payments before approval.
MEFA
Despite having Massachusetts in its name, the Massachusetts Educational Financing Authority (MEFA) lends across the U.S. You can take out a loan starting at $1,500 and choose repayment terms of 10 or 15 years.
Cosigner release is only available on 15-year undergraduate loans for which you defer in-school payment. To qualify, you must:
- Make your first 48 payments on time and in full
- Meet the lender’s underwriting requirements for a loan
Pros
- No fees: There areno origination or late payment fees.
- Low interest rates: MEFA offers a low maximum interest rate of 6.99%.
Cons
- Long road to cosigner release: You must make 48 consecutive, on-time payments before approval.
- No discounts: Unlike most lenders, MEFA doesn’t offer any discounts such as autopay.
Sallie Mae
Sallie Mae provides student loans starting at $1,000 with terms from 10 to 20 years. If you can meet the lender’s requirements, you might be able to get your student loan cosigner released in just 12 months.
For cosigner release, you have to:
- Make 12 consecutive on-time payments (prepaying the full amount in a shorter time period also counts)
- Provide proof that you graduated
- Not have placed student loans in hardship forbearance or an adjusted repayment plan for the previous 12 months
- Pass a credit and income check
Pros
- Multi-year advantage: Borrowers have a 90% approval rate if they return to Sallie Mae for another school year with a cosigner.
- Less-than-half-time eligibility: Unlike most lenders, Sallie Mae allows less-than-half-time students to apply for a student loan.
Cons
- Graduation is required for cosigner release: You won’t be able to release your cosigner until after you’ve graduated and provided proof.
- Eligibility requirements not disclosed: The minimum income or credit score requirements are not disclosed.
Methodology
Credible evaluated private student loan lenders in 10 different categories to determine the best lenders for parent plus student loans. This included interest rates, repayment options, terms, fees, discounts, customer service availability, as well as eligibility requirements and cosigner release options.
Basics of student loans with cosigner release
After your cosigner is released from the loan, they’ll no longer be obligated to repay it. Plus, the loan will no longer impact their credit.
“[Cosigner release] can allow student borrowers to make a joint-responsibility loan just their own loan and their own responsibility,” explains student loan lawyer Adam Minsky.
Cosigner release is only available for private student loans, not federal ones. That’s because most federal student loans don’t require a cosigner. Students can usually borrow federal student loans on their own without having to meet any credit or income requirements.
The only exception is the federal PLUS loan, which is available to graduate students and parents. Borrowers with adverse credit may have to apply with an endorser, which is similar to a cosigner. However, the government doesn’t offer an endorser release on PLUS loans.
Some private lenders, though, will let you release your cosigner after you meet certain conditions. Cosigner release isn’t automatic — you’ll need to request it specifically and may need to provide proof of your ability to manage the loan on your own.
How to apply for a private student loan with cosigner release
Before applying for a private student loan with cosigner release, it’s a good idea to maximize your eligibility for scholarships, grants, work-study and other jobs, and federal student loans.
If you still have a gap in funding, a private student loan could help. Here’s how to get one:
- Research lenders that offer cosigner release. Start by looking into lenders that offer cosigner release and reviewing their borrowing requirements. Check to see if the lender has a minimum credit score or income to make sure it would be a good fit with your (or your cosigner’s) finances.
- Check your credit (or enlist a cosigner). You’ll need to meet a lender’s underwriting requirements for credit and income to qualify for a private student loan, or apply with a cosigner who can. It’s worth checking your credit score and reviewing your credit report before you start applying so you know what you’re working with.
- Prequalify for a loan. Some lenders let you prequalify for a student loan online in a minute or two. By prequalifying, you can check your rates with no impact on your credit score.
- Compare your offers. Review your loan offers to decide which one is the best fit for you. Look at loan features such as interest rate, fees, and repayment terms. It could also help to read lender reviews to see what previous borrowers had to say.
- Submit a full application. Once you’ve selected a loan, you’ll submit an official application with your and your cosigner’s information. You’ll also need to provide verifying documentation, such as pay stubs or tax returns.
At this point, your lender will certify your cost of attendance with your school. Once the loan is approved, the lender will likely send your loan directly to your financial aid office, which will apply it to tuition, fees, and other required expenses before sending the remaining amount to you.
How to apply for cosigner release on existing private student loans
If you already have a private student loan, you’ll need to apply for cosigner release, and approval isn’t guaranteed. Each lender has its own process, but you may need to include information, such as proof of income, employment, and graduation.
“The lender or servicer has broad discretion about whether to allow [cosigner release],” says Minsky. “Usually a perfect or near-perfect repayment history for a lengthy period of time is required.”
The lender may also ask what your monthly rent, car payment, or other expenses are to confirm you have enough room in your budget to afford your student loan payments.
Ask your lender for the exact steps you need to take to apply. If your application is approved, you may need to sign new paperwork to assume sole responsibility for the loan.
Criteria for cosigner release
Most lenders have the following requirements for cosigner release:
- Make a certain number of full, on-time, consecutive payments on your loan. You may need to make anywhere from 12 to 48 payments or more to qualify.
- Have a good credit score. You may need a score of 670 or higher, but the exact minimum will vary by lender.
- Show proof of income. Your lender will want to see that you have sufficient cash flow to pay back your loan.
If you need to improve your credit score to qualify for cosigner release, there are a few steps that could help. Make on-time payments on your loan, and try to keep your credit utilization ratio below 30%. If you spot any errors on your credit report, try disputing them to have them removed. By taking some time to build your credit, you could increase your chances of getting approved for student loan cosigner release.
What if I can’t get approved for cosigner release?
If you’re unable to get approved for cosigner release from your lender, one option is to refinance the loan in your name. Your old loan will be paid off and your cosigner will be released. You may even qualify for a lower interest rate by refinancing, saving you money on interest.
