What Is Cosigner Release for Student Loans?
Cosigner release is a process where the lender removes the cosigner from a private student loan after the primary borrower meets certain conditions. This frees the cosigner from liability -- if the borrower defaults, the lender can no longer pursue the cosigner for payment.
Important: federal student loans do not have cosigners. Federal Parent PLUS loans are the parent's obligation, not cosigned. Cosigner release only applies to private student loans from lenders like Sallie Mae, Discover, Citizens Bank, Earnest, and others.
Lender Cosigner Release Requirements
Each lender sets its own cosigner release criteria. Common requirements include:
- 12-48 consecutive on-time payments (most common: 24 or 36 months)
- Primary borrower meets minimum credit score (typically 670-700)
- Primary borrower meets income requirements (debt-to-income ratio)
- No delinquencies on any credit account (not just the student loan)
- Loan must be in active repayment (not in deferment or forbearance)
| Lender | Payments Required | Credit Score | Auto Release? |
|---|---|---|---|
| Sallie Mae | 12 consecutive | Not disclosed | No -- must apply |
| Discover | 24 consecutive | Not disclosed | No -- must apply |
| Citizens Bank | 36 consecutive | Not disclosed | No -- must apply |
| College Ave | 24 consecutive | Not disclosed | No -- must apply |
If Cosigner Release Is Denied: Alternatives
Refinancing is often easier than cosigner release. The primary borrower applies for a new loan in their name only from a different lender, using the proceeds to pay off the cosigned loan. Lenders like SoFi, Earnest, and Splash Financial offer student loan refinancing without a cosigner if you meet their credit and income requirements.
Other options: accelerate payments to reduce balance faster, wait and reapply after building more credit history, or consult a bankruptcy attorney if the debt is causing severe financial hardship.
Cosigner Liability and Bankruptcy
If the primary borrower files bankruptcy, the cosigner remains liable for the full loan balance. Private student loans may be dischargeable in bankruptcy under the Brunner test (undue hardship), but even if the borrower obtains a discharge, the cosigner's obligation survives. The cosigner would need to file their own bankruptcy to discharge their liability.
Chapter 13 bankruptcy provides a codebtor stay that temporarily protects cosigners from collection during the case. Chapter 7 does not offer this protection.
Frequently Asked Questions
How do I get a cosigner release on my student loans?
Contact your lender to request a cosigner release application. You must typically have made 12-48 consecutive on-time payments, meet a minimum credit score, and demonstrate sufficient income. The process takes 2-4 weeks. If denied, refinancing in your name only is an alternative.
What percentage of cosigner release applications are approved?
Approval rates are low -- consumer advocates estimate 10-20% for some lenders. Lenders benefit from keeping cosigners as additional security. Be prepared for denial and have a backup plan such as refinancing.
Can I remove a cosigner from a federal student loan?
Federal student loans do not have cosigners. Parent PLUS loans are the parent's sole obligation. The only way to move a Parent PLUS loan to the student is through refinancing with a private lender.
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