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Parents are taking a risk when co-signing their child’s student loans, but with a co-signer release, a borrower can remove a co-signer from their student loan account after meeting certain requirements. Most lenders look at credit score, annual income and the number of on-time, consecutive payments to determine eligibility. If you meet those requirements, you may be able to apply for co-signer release in as little as two years.
If you’re considering applying for a private student loan to help pay for school, getting a co-signer can help improve your odds of getting approved and securing favorable terms. If you will want to release the co-signer once the student has financial independence, choose a lender that offers co-signer release. Here are some companies that make this process fast and easy.
Sallie Mae offers undergraduate loans, career-training loans and a long list of graduate loans.
With a Sallie Mae loan, you can remove a co-signer after 12 consecutive on-time monthly payments, including principal and interest – one of the fastest co-signer releases in the industry.
Other requirements include:
- You’ve graduated or completed your certificate program.
- You’re the age of majority in your state.
- You’re a U.S. citizen or permanent resident.
- Your student loans are not in hardship forbearance or enrolled in a modified repayment program the year before you apply.
- You’ll also need to provide proof of income and undergo a credit review, similar to what you’d experience if you were to apply for a new loan.
SoFi was the first financial institution to offer student loan refinancing, but it also offers a variety of private student loans, including undergraduate loans, graduate loans, law school loans, MBA loans and parent loans. Co-signer release is available only on private student loans.
If you have SoFi private student loans, you may be able to request co-signer release if they were disbursed after May 1, 2019. All loans disbursed before that date are ineligible.
To qualify, you must make 24 consecutive on-time principal and interest payments. You must also be the age of majority in your state and meet the lender’s underwriting criteria.
Rhode Island Student Loan Authority offers undergraduate loans, graduate loans, parent loans and refinance loans nationwide. While it’s not available on refinance loans, RISLA does offer co-signer release after 24 consecutive on-time monthly payments on its private loans.
Unlike other lenders, RISLA is transparent about what it takes to get approved for co-signer release. Eligibility requirements include:
- You’re at least 18 years old.
- You’re a U.S. citizen or permanent resident.
- You earn at least $40,000 per year.
- Your FICO credit score is 680 or higher.
- Your debt-to-income ratio is 50 percent or below.
- You have enough cash in checking, savings and investment accounts to cover at least one month of your financial obligations, and that balance has been on deposit for 30 days or more.
- You’ve never been enrolled in RISLA’s income-based repayment program.
- You don’t live in Colorado, Connecticut or Maine.
Ascent is an online lender offering U.S., DACA and international students private undergraduate and graduate student loans. In addition to the traditional co-signed loan, borrowers can choose a non-co-signed or non-co-signed future income-based student loan. After making 12 consecutive, on-time full principal and interest payments, you can apply to release your co-cosigner.
Borrowers must also meets the requirements of Ascent’s non-cosigned credit-based loan, including:
- You’ve completed your program.
- You have an annual income of at least $24,000.
- You have at least two years of credit history with a minimum credit score.
- You’re of majority age in your state of residence.
- You’ve requested to enroll in automatic payments.
- You’re a U.S. citizen, permanent resident or DACA student.
How to release a co-signer from a student loan
The application process for a co-signer release varies by lender. Sometimes, you may need to fill out an application on paper and upload it to your online account or mail it to the lending institution. In others, you may be able to apply through your online account.
Because there’s no single way to do it with every lender, check with yours directly to find out what the process looks like, including where you can find the application, what information and documents you need to provide and how long the process takes from start to finish.
What to do if you can’t release a co-signer from a student loan
Student loan co-signer release can help your co-signer by removing the balance and payment information from their credit report. This can make it easier for them to get approved for credit, reduce their debt-to-income ratio and also avoid any potential negative consequences if they can’t make their payments in the future.
But co-signer release may not be possible for some borrowers or with all lenders. If co-signer release is not an option, here are two options to consider:
- Work on improving your credit: If you were denied because you don’t meet the underwriting criteria, work on building your credit history so you can get approved the next time you apply. In some cases, you may also need to increase your income or meet other stipulations to get approved. Check with your lender to find out the reasons for the denial and take immediate action.
- Refinance the loan: If your lender doesn’t offer co-signer release, you may be able to refinance the loan in your name alone. Credit underwriting requirements can vary by lender, so it’s possible to get a new loan with a lender that has less-stringent eligibility criteria. Just be sure to pay attention to the interest rate and repayment term. If it becomes more expensive, it may be worth waiting until your credit situation has improved.
There’s no right approach for everyone in this situation, so think carefully about your needs and your co-signer’s before you decide how to proceed.