How To Pay For College Understanding Cosigner Release for Private Student Loans Written by Zachery Grieson May 15th, 2025 I joined College Coach’s finance team after working in the financial aid office at my alma mater, Loras College. While at Loras, I helped develop and create models to award our merit scholarship dollars and our need based resources and assisted students and parents with financial aid applications. I also reviewed and decided on appeals and negotiations along with a committee, and provided loan counseling to students and families I have also been very active in state financial aid associations, most recently finishing as the chair of the professional development committee. I completed my master’s degree in Business and Analytics and have a Bachelor’s degree in public relations. Learn More About Zachery student loans, paying for college, financial planning, Cosigner release is a feature offered by some private student loan lenders that allows the cosigner to be removed from the loan after certain conditions are met. Once released, the cosigner is no longer legally responsible for repaying the loan, and the loan becomes the responsibility of the student borrower. How Does It Work? Each lender has its own rules, but generally, the student borrower must: Make a set number of on-time monthly payments (typically 12 to 48 months) Demonstrate sufficient income and good credit Submit a formal application for cosigner release Sometimes provide proof of graduation or employment Once approved, the cosigner is released from the loan, and the borrower becomes solely responsible for repayment going forward. In this process, all previous terms, conditions, payment schedules, and rates remain unchanged. Pros of Cosigner Release Reduced financial liability: Cosigners—often parents—are no longer legally obligated to repay the debt if the borrower can’t. This can be especially helpful for families who want to free up their debt-to-income ratio to borrow for other purposes, including supporting a younger child who may also need a cosigner. Credit score protection: Removing the cosigner means the loan will no longer impact their credit utilization or debt-to-income ratio. Improved relationships: Shared financial commitments can put stress on personal relationships. Cosigner release offers peace of mind to both the student and the cosigner. Cons to Be Aware Of Approval process: Not all borrowers qualify. Denials are common if the borrower hasn’t built sufficient credit or income history. Not available from all lenders: Some lenders don’t offer cosigner release at all, or they may have restrictive or unclear requirements. May require a new credit check: The borrower must demonstrate the ability to manage the loan independently, which can be a barrier for recent graduates still building financial stability. Alternatives to Cosigner Release If your goal is to remove the cosigner’s responsibility or improve loan terms, consider the following options: Refinancing: The student borrower can apply for a new loan in their own name to pay off the original. This can release the cosigner and potentially lower interest rates—but only if the borrower qualifies independently. Aggressive loan repayment: Making extra payments can reduce the total loan burden and shorten the repayment timeline. If the lender allows it, this may lead to cosigner release eligibility sooner. Applying for a cosigner release or a refinance requires strong credit; if either option may be in your future, focus on demonstrating steady income, keeping debt-to-income ratios low, practicing good repayment habits, and working to improve your credit score. Final Thoughts Cosigner release can be a valuable feature for families looking to shift financial responsibility to the student after graduation. But it's important to understand the eligibility requirements and weigh the pros and cons before assuming it's a guaranteed outcome. Whether through cosigner release or refinancing, the key is to have a clear plan for long-term financial independence—and to maintain open communication between the student and the cosigner every step of the way.
