When it comes to getting student loans, most young borrowers will need a co-signer in order to qualify for a loan. Co-signers, in essence, are responsible for paying back a loan if the borrower is somehow unable to. This can hurt the co-signer’s personal finances and credit score if things go badly.
So is it possible for a student loan co-signer to be released from their obligation? At what point does the borrower assume full responsibility?
Refinance Student Loans
After graduation, if the student borrower has a steady income, a good credit score, and a history of on-time payments, then it’s possible to apply for student loan refinance and become fully in charge of their own repayments—thus releasing their co-signer.
The best time to do this is when the borrower has a steady, well-paying job and has had time to build up their credit score. Ensure that you’re on good financial standing before refinancing.
Co-Signer Release Option
Most (but not all) student loan lenders will have a co-signer release option available. Each lender will have slightly different requirements for borrowers and their co-signers to qualify for the release, but generally speaking it will include some of the following:
- A history of on-time payments
- A credit score requirement
- A certain income level
Students who meet the requirements may be able to file an application online, or can request a form from their lender directly.