Myth: Student Loan Cosigners Help You Pay Off The Loan

Pen and dollar sign - you may ask yourself: why do most student loans involve a cosigner?Most college students who take out private student loans will need a cosigner in order to be approved for the funds. So what exactly does a cosigner do when it comes time to repay the loan? 

Myth: Student Loan Cosigners Help You Pay Off The Loan

If you’re hoping the cosigner is a buddy who will help pay off parts of your debt, I’m sorry to say that’s not the case. Your cosigner is not responsible for helping you pay off your student loan, they’re there to act as a sort of safety net. So why do most student loans involve a co-signer if they won’t help you pay off your loan? The truth is a co-signer is necessary to protect the interests of the loan lender.

Consolidate and lower the interest on your student loans
Variable APR from 1.87% – 6.52%
Fixed APR from 2.30% – 5.96%

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Wondering Why Most Student Loans Involve A Cosigner?

You only need a cosigner when taking private student loans. Private lenders use your credit score as the primary criteria for lending your money. A good credit score means you are a responsible borrower, which makes it easier for your loan application to get accepted.

The problem is, as a student you are not likely to have had much opportunity to build a strong credit history yet, so the lender has no way of knowing whether you are a high or low risk borrower. This is why private lenders require student borrowers to have a cosigner with a good credit history.

By agreeing to co-sign your loan, cosigners are in effect taking responsibility for it and can be held accountable for repaying the amount only if you—the borrower—default on the loan.


Lender Rates (APR) Eligibility
Earnest company logo.
Variable APR: 1.74% - 5.64%*
Fixed APR: 2.44% - 5.79%*
Undergraduate and Graduate
Lendkey company logo.
Variable APR: 1.90% - 5.25%*
Fixed APR: 2.49% - 7.75%*
Undergraduate, Graduate, Parent PLUS
Credible company logo.
Variable APR: 1.80% - 9.99%*
Fixed APR: 2.15% - 9.99%*
Undergraduate and Graduate
Laurel road company logo.
Variable APR: 1.89% - 5.90%*
Fixed APR: 2.50% - 6.00%*
Undergraduate and Graduate
Commonbond company logo.
Variable APR: 1.98% - 7.04%*
Fixed APR: 2.59% - 6.94%*
Undergraduate, Graduate, Parent PLUS
Fixed APR: 2.44% - 6.22%*
Undergraduate, Graduate, Parent PLUS
VISIT ISL Education Lending
Variable APR: 1.87% – 6.52%**
Fixed APR: 2.30% – 5.96%**
Undergraduate, Graduate, Parent PLUS
VISIT Nelnet
Variable APR: 2.94% - 4.79%*
Fixed APR: 2.99% - 4.89%*
Undergraduate and Graduate
VISIT College Ave
Variable APR: 1.86% - 6.01%*
Fixed APR: 2.47% - 5.99%*
Undergraduate and Graduate, Parent PLUS

*APR includes a 0.25% interest rate reduction for enrollment in automatic payments.

**Interest rate reduction of .25% for automatically withdrawn payments from any designated bank account (“auto debit discount”). Auto debit discount applies when full payments (including both principal and interest) are automatically drafted from a bank account. The auto debit discount will continue to apply during periods of approved forbearance or deferment if the auto debit discount was in effect at the time of receiving the forbearance or deferment. Auto debit discount will remain on the account unless (1) the automatic deduction of payments is canceled or (2) there are three consecutive automatic deductions returned for insufficient funds at any time during the term of the loan.

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