How to Remove a Cosigner From a Student Loan

If you’re like many college graduates, you may have had a parent or other trusted person serve as a cosigner on your student loan. But now, you want to release them from that obligation.

Releasing a cosigner from your loan is entirely possible, but it may be more complicated than you’re expecting. Take a look at exactly how to remove a cosigner from a student loan.

Can you remove a cosigner from a student loan?

Yes, you can. However, you can’t do it instantly. For a cosigner release, student loan servicers generally give you two options:

• Apply and get approved for a cosigner release
• Refinance the loan in your name

Before going into more detail on how to remove a cosigner from a student loan, it’s important to note that most federal student loans don’t require a cosigner or give you the option to add one.

Direct PLUS loans are the only federal loans that may allow cosigners (called “endorsers”). If the government determines that you have an adverse credit history, you might be required to have an endorser agree to pay if you cannot.

Notably, there is no endorser release form. If you want to release an endorser from a Direct PLUS loan, you’ll need to either consolidate it or pay it in full.

Cosigner release

When someone cosigns a loan, they’re taking on a serious responsibility of agreeing to pay the loan if you can’t or won’t. When a lender releases a cosigner, they’re giving up their right to pursue that person for the debt if you default.

For that reason, the lender needs to see that you can assume the debt yourself before they remove your cosigner.

How cosigner release works

To prove to the lender that you can take on the debt yourself, you’ll need to submit an application. If the application is approved, your cosigner will be taken off the loan and released from all responsibility.

Eligibility requirements for cosigner release

Each lender sets its own requirements. However, when you’re applying for cosigner release, student loan companies often require you to do the following:

• Provide proof of graduation
• Provide proof of income
• Have made at least 12 months (sometimes more) of on-time payments
• Pass a credit review

Most lenders don’t publish an exact credit score cutoff to be approved for a cosigner release. However, you’ll usually need a credit score that’s at least in the “good” range (670 or higher).

During the credit review, lenders will usually check to see if you’ve had any serious delinquencies, bankruptcies, foreclosures, or other negative credit events in the recent past.

Refinancing to remove a cosigner

What happens if your cosigner release application isn't approved? You might still be able to remove a cosigner through refinancing. Here’s how the process works:

• You apply for a new student loan with no cosigner
• If you’re approved, your new lender pays off the old loan
• You make payments toward the new loan, which is in your name only

Just as you would when taking out any other kind of loan, you should shop around and compare rates when trying to refinance. Many lenders offer pre-approvals, so you can usually see your loan terms without hurting your credit.

What you need to qualify for refinancing

Generally, you’ll need the following to qualify to refinance your student loan:

• A good credit score (usually 670+)
• Proof of income
• A debt-to-income ratio of less than 50%
• A degree

Some lenders may have more flexible requirements than others, so make sure to check all available options before assuming you don’t qualify.

Other ways to remove a cosigner from a student loan

If you’ve looked into how to remove a cosigner from a student loan but don’t qualify to do so directly, you have a couple of options.

Paying off the loan in full

Once the loan is paid off, your cosigner has no continuing obligation to the lender (and neither do you).

Loan consolidation (federal loans)

If you have a Direct PLUS loan with a cosigner, consolidating it using a Direct Consolidation Loan (in your name only) transfers all responsibility for the debt to you.

Need to build credit before releasing a cosigner?

Releasing a cosigner from your loan can give them peace of mind. It’s also a meaningful step in your own life since you’re taking full control of your debts.

However, if your credit score is too low to release your current cosigner, you might not know how to go about improving it. We’re here to help.

Kikoff is a credit-builder app designed to deliver real results. We can help you build credit with our zero-interest credit line, rent and bill reporting, and other tools. It’s free to join, and there’s no credit check. Get started with us today!