Do You Need a Cosigner for a Student Loan?

You don’t always need a cosigner for a private student loan, but most undergraduates do. That’s because private lenders look for strong credit and income, which many students don’t yet have. In 2024, nearly 85% of private student loan borrowers applied with a cosigner, according to Credible marketplace data. 

Federal student loans rarely require a cosigner. The exception is Direct PLUS Loans for graduate students and parents, which may require an endorser if the borrower has adverse credit. An endorser works like a cosigner — they agree to repay the loan if the borrower fails to do so.

This guide explains when a cosigner is needed, what the rules are, and how cosigner requirements work for different types of student loans.

Current private student loan rates

Do federal student loans require a cosigner?

Federal student loans usually don’t require a cosigner because eligibility isn’t based on your credit score or income. Instead, the federal loan program was created to make higher education more affordable and accessible. That means you can qualify for Direct Subsidized and Direct Unsubsidized Loans without a credit check, and the amount you’re offered is based on your school’s cost of attendance, your year in school, and your financial need.

There is one exception for Direct PLUS Loans for graduate students and parents of dependent undergraduates. These loans do look at your credit history. If you have adverse credit, you’ll need an endorser to be approved. An endorser is similar to a cosigner, since they agree to take responsibility for the loan if you’re unable to repay it.

See Also: How To Get a Student Loan With No Credit

Do private student loans require a cosigner?

Whether you need a cosigner for a private student loan depends on your financial profile. Private lenders review your application through an underwriting process, which looks at your credit score and income to assess the likelihood of repayment.

“Private student loans typically require a cosigner, as many borrowers do not have a credit history or have a limited one,” says Jason Fannon, certified financial planner (CFP) and senior partner at Cornerstone Financial Services.

From a lender’s perspective, an 18-year-old heading to college without a good credit score or work history is too risky to approve without someone else sharing responsibility for repayment. That’s why many undergraduates need a cosigner, even if the lender doesn’t explicitly require one. 

Even students who can qualify independently may still benefit from applying with a cosigner, since adding a cosigner with strong credit can help secure better terms. 

“A cosigner can also help with getting a lower interest rate if the cosigner has strong credit,” explains Domenick D’Andrea, a financial adviser and co-founder of DanDarah Wealth Management. “This can improve your chances of getting more favorable terms.”

See Also: Can I Get a Student Loan if My Cosigner Has Bad Credit? 

Who can be a cosigner on a student loan?

If you apply for a private student loan and need a cosigner, the person you choose must meet the lender’s income and credit requirements. Otherwise, adding them to your application won’t improve your chances of approval. The point of a cosigner is to show the lender that a financially responsible person is willing to take on the loan if you don’t repay it.

Eligibility requirements vary by lender, but cosigners usually must:

• Have good credit (often a FICO score of 670 or higher)
• Be at least 18 years old
• Have a steady income
• Be a U.S. citizen or permanent resident

Parents, grandparents, guardians, and close family members are the most common cosigners, since they’re often willing to help and have the financial stability lenders want to see. However, any financially qualified adult who meets the lender’s requirements can cosign your loan.

See Also: Do Parents Have To Cosign Student Loans?

What are the risks of cosigning a student loan?

Cosigning can help students qualify for loans and secure better rates, but there are significant risks to consider.

“Cosigners are legally responsible for the loan,” explains Jack Wang, a wealth adviser and host of the “Smart College Buyer” podcast. “I often run into parents who don't realize this.”

Once you cosign, the loan appears on both your credit report and the borrower’s. 

“This can impact the ability of the cosigner to get other credit in the future, such as refinancing a mortgage or getting an auto loan at a lower rate,” warns Wang.

Because lenders treat cosigned debt as your own, it affects your debt-to-income ratio (DTI). 

“Creditors look at debt-to-income ratios when they decide if they are going to approve you for future loans,” says D’Andrea. If the student loan balance is large, it could push your DTI too high to qualify for additional credit.

Payment history is another risk. Any late or missed payments will appear on the cosigner’s credit report. 

“The risks of cosigning a student loan are primarily to your credit,” says Fannon. “Any late or nonpayment can reduce the borrower’s credit score.”

In the worst-case scenario, the cosigner could end up repaying the entire loan. 

“If the student borrower doesn't pay the loan, the lender will go after the cosigner for payment,” explains Wang.

Can student loan cosigners be removed from the loan later?

Because student loans can take years or even decades to repay, many cosigners worry about being tied to the debt long-term. The good news is that it may be possible to remove a cosigner from the loan. 

Many private lenders offer a cosigner release option, which allows the cosigner to be removed once the primary borrower meets certain requirements. These requirements vary but often include:

• Meeting the lender’s credit score and income requirements
• Making 12 to 36 consecutive on-time payments
• Submitting a cosigner release application

Not all lenders offer this option, and even when they do, approval isn’t guaranteed.

If cosigner release isn’t an option, refinancing can be another way to remove a cosigner. With refinancing, the borrower applies for a new loan in their own name and uses the funds to pay off the original debt.

How to get a student loan without a cosigner

If you’re denied a student loan with a cosigner or you prefer not to use one, you still have options for borrowing on your own:

• Apply for federal student loans: Federal loans generally don’t require a cosigner or a credit history to qualify. 
• Build your credit: You can do this with a secured credit card or by becoming an authorized user on someone else’s long-standing account with on-time payments and low credit use.
• Show proof of income with part-time work: Meeting a lender’s minimum income requirements can improve your chances of qualifying for a loan.
• Look into lenders that don’t require cosigners: Some private lenders, like Ascent, MPOWER, and A.M. Money, offer student loans without a cosigner. However, keep in mind that these loans may come with higher interest rates.

If you still can’t qualify for enough funding, you may need to consider alternatives such as attending a more affordable school or waiting until you’ve built the credit and income history needed to borrow on your own.