Do you need a co-signer for student loans?

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A student loan co-signer is an adult with a good credit history and score who signs for a loan alongside you. Having a co-signer can help you get the best student loan rates, but it may also be necessary in order for you to qualify at all.

Do you need a co-signer for student loans?

Whether you need a co-signer for student loans depends on which type of loan you’re taking out — federal or private.

For most federal student loans, you can apply without a co-signer. This is because all undergraduate loans and some graduate school loans do not require a credit check and therefore are available to all eligible students who wish to apply. With some graduate student loans, the U.S. Department requires an endorser if you have an adverse credit history.

Private student loans do require a co-signer if you don’t have much credit history or if your credit score is low. However, you may be able to get a private student loan without a co-signer with lenders that have nontraditional application requirements or those that are more flexible about credit scores.

Keep in mind that your co-signer shares the legal responsibility of your loan. In other words, they’re obligated to repay the loan if you fail to, and their credit score could suffer if you make late payments. This is why it’s critical to carefully consider who you ask to co-sign your loan.

Co-signing federal student loans vs. private student loans

The process of co-signing a student loan differs by lender. Here’s what to know if you’re applying for federal or private student loans.

Federal student loans

All undergraduates can apply for federal student loans without a co-signer, and the same is true for graduates who apply for Direct Unsubsidized Loans. For grad PLUS loans, graduate students must go through a credit check; if you have adverse credit history, you’ll need an endorser, who essentially serves as a co-signer on the loan.

To apply for these government-backed loans, you will need to fill out a Free Application for Federal Student Aid, or FAFSA. If you’re a dependent on your parents’ tax return, they will need to supply their information as well. Endorsers don’t need to apply with you, but they will need to submit an endorser addendum.

Private student loans

Private student loans, unlike their federal counterparts, are issued by banks, credit unions and online lenders. Instead of filling out a FAFSA, you apply for private student loans by submitting a loan application. This application considers your credit history, credit score, income and employment history to determine whether you qualify and what rate you’ll receive.

If you don’t meet a lender’s credit requirements, you will need a co-signer to get a private student loan — which is why most undergraduates who take out a private student loan do so with a parent or other family member. You’ll need to include the co-signer’s information when you submit your application.

Releasing a co-signer from your loan

Private lenders commonly require co-signers, but some lenders may release co-signers from student loans once the primary borrower can meet certain requirements (e.g., creditworthiness, a certain number of on-time payments, etc.).

Unfortunately, getting a co-signer release can be tricky. A Consumer Financial Protection Bureau report from 2015 revealed that 90 percent of private student loan borrowers who applied for a co-signer release were denied.

If you anticipate wanting to release your co-signer from the loan eventually, look for lenders that are upfront about their co-signer release policy. From there, ensure that you make timely payments on your loans and take steps to build your credit score to give yourself the best chance of qualifying.

How to get a student loan without a co-signer

Your best option for getting a student loan without a co-signer is to apply for a federal student loan. If you must apply for a private student loan, you’ll need to make sure that you’re in good financial health to qualify for a loan without a co-signer.

Here are the best ways to increase your chances of being approved:

  • Make timely payments on existing credit. Make your payments on your credit cards on or before the due date. This shows that you are trustworthy and will help boost your credit score.
  • Don’t max out your credit card. Every credit card has a maximum credit limit. If you are constantly using the full amount, it will impact your credit score negatively. It is recommended that you use 30 percent or less of your credit amount to be considered a safe borrower.
  • Establish a steady income. Many lenders have a minimum annual income requirement, but they also typically look for borrowers with a steady source of income.
  • Find a lender with fewer requirements. There are some student loan lenders that want to make it easier for borrowers with little credit to access student loans. These lenders may look at your school information, major and future earnings potential to qualify you for a loan.

The bottom line

When you need help paying for college, consider all your options before taking out a loan with a co-signer. A co-signer might help you secure a student loan when your personal credit or income isn’t strong enough to qualify on your own, but they are equally liable for student loan debt, as much as if they were the sole borrower. You don’t want to make someone liable for your loans if you don’t have to. If you do enlist a co-signer, have an honest conversation beforehand about expectations once the loan enters repayment.

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Written by
Emma Woodward
Contributing writer
Emma Woodward is a freelance writer who loves writing to demystify personal finance topics. She has written for companies and publications like Finch, Toast, JBD Clothiers and The Financial Diet.
Edited by
Student loans editor