Dear Dr. Don,
I am a co-signer on my son’s student loan through ACS Education Services and a major bank. He has consistently made payments over the last two years on the student loan. I called ACS and asked to be removed as the co-signer. They stated that the term was for 36 months of consistent payment. Since he had a deferral on his account until March 2012, the 36-month period didn’t start until April 2012, even though the payments began in August 2011.

They said if his payment was late, even by a day, the 36 months start over from that point. Can you please clarify if this is legal? Everything I have heard suggests that the standard is for 24 months of consistent payments.

Thank you,
— Donna Debtor

Dear Donna,
The bank originated the student loan, but ACS is the loan servicer. It keeps track of loan payments, terms and loan balance. There are plenty of student loan borrowers frustrated with ACS, including you. Still, it doesn’t mean what they’re doing is necessarily wrong.

Look at the loan document to find provisions for release of a co-signer. The loan agreement determines provisions of the loan, not the loan servicer.

With private student loans, terms vary by lender. On-time payments aren’t always enough. To qualify, the primary borrower also has to meet the credit requirements to have the loan in his name only.

The “no late payment” requirement typically requires payment to be made within the grace period. Check the loan agreement for that provision as well.

Odds are that the loan servicer correctly relayed the terms of the loan agreement and when you would qualify to be released as co-signer. After reviewing the loan documents, if you find that they are violating terms of the loan agreement, then you can pursue other regulatory or legal options.

Get more news, money-saving tips and expert advice by signing up for a free Bankrate newsletter.

Ask the adviser

To ask a question of Dr. Don, go to the “Ask the Experts” page and select one of these topics: “Financing a home,” “Saving & Investing” or “Money.” Read more Dr. Don columns for additional personal finance advice.

Bankrate’s content, including the guidance of its advice-and-expert columns and this website, is intended only to assist you with financial decisions. The content is broad in scope and does not consider your personal financial situation. Bankrate recommends that you seek the advice of advisers who are fully aware of your individual circumstances before making any final decisions or implementing any financial strategy. Please remember that your use of this website is governed by Bankrate’s Terms of Use.