How to Get a Student Loan Co-Signer Release

When a college student takes out a private student loan, it’s common for them to secure a co-signer because they lack a sufficient credit history to qualify. A co-signer, often a borrower’s relative, shares responsibility with the primary borrower for paying off a private student loan. By contrast, most federal student loans don’t allow co-signers.

Some, but not all, providers of private student loans let a borrower do this. Removal of a co-signer can happen only after the borrower has made a predetermined number of on-time payments on a private student loan and has met other requirements.

Learn how to get a student loan co-signer release.

How to Release a Co-Signer From Your Student Loan

The co-signer release process, including requirements you must meet for approval of a release, will vary from one lender to another lender. Keep in mind that only the borrower can initiate the release process.

Your first step is to contact your lender or loan servicer to find out whether or not it offers co-signer releases. Here’s what the rest of the process looks like for releasing a co-signer.:

1. Make sure you’re up-to-date on loan payments.
2. Determine whether your payment history satisfies lender requirements. This means you either made a certain number of consecutive on-time loan payments of principal and interest over a certain period, such as 12, 24, or 48 months, or you prepaid the equivalent amount of principal and interest payments.
3. Verify whether any of your federal student loans were in a hardship, forbearance, or income-based repayment program for, say, the past 24 months.
4. Fill out a release application. If your payment history is solid, you can start the application process. You should be able to find a release application on the website of your lender or loan servicer.
5. Offer proof of graduation or completion of a certificate program. A co-signer release normally can’t be done if the borrower remains in school.
6. Supply proof of income. This may include providing your pay stubs, W-2 forms, or most recent tax return. Having sufficient income assures a lender that you’ve got enough money to make the loan payments on your own.
7. Complete a credit check. The lender will want to see that your credit history is free of blemishes like a default on a student loan, a bankruptcy, or a 90-day delinquency within the past 12 months. The lender likely will require a minimum FICO credit score, too.

Potential Risks of Releasing a Co-Signer

Releasing a co-signer from a private student loan does come with potential risks for the remaining borrower. Among them are:

• The remaining borrower can’t keep up with loan payments. A co-signer release takes away a financial backup if the remaining borrower runs into financial trouble and struggles to make loan payments.
• The remaining borrower may see their credit score go down. Without the ability to lean on a co-signer, the borrower may end up making late payments or missing payments altogether. This activity could leave a negative mark on the borrower’s credit report and trigger a drop in their credit score.
• The remaining borrower may be unable to qualify for other lending products. Let’s say the borrower is coping with financial problems that interfere with their ability to make loan payments. Without a co-signer to serve as a lifeline, these credit woes may make it difficult, if not impossible, to be approved for a credit card, car loan, mortgage, or other lending product.
• The remaining borrower might be tempted to take on high-interest debt. If the borrower finds that the student loan payments are now stretching their budget too thin, they may turn to ultra-high-interest lending products, such as payday loans and car title loans, to fill the monetary void. In this situation, the co-signer may have been able to rescue the student borrower.

Alternatives to Releasing a Co-Signer

In some cases, you may be unable to release a co-signer from a private student loan, either because your lender doesn’t offer this option or because it rejects your application. Fortunately, alternatives to releasing a co-signer are available. They include:

• Refinancing the loan: If you’re able to refinance, the co-signer is removed and you become solely responsible for paying off the loan. However, you’ll need to meet a lender’s income and credit requirements in order to refinance the loan.
• Consolidating loans: Securing one student loan that consolidates several student loans may enable you to remove a co-signer. As with refinancing, a lender will consider your income and credit before approving an application for a loan consolidation.

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