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Without an established credit history most students will need a cosigner to be approved for a private student loan. Federal student loans do not require a cosigner. Once all other forms of financial aid is exhausted, a credit-worthy cosigner most likely will be necessary to qualify for private student loans. Learn more on how to find and ask a cosigner for student loans
Top reasons to cosign a student loan
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Invest in your student’s future
Obtaining a higher education degree enables graduates to be qualified for competitive high-paying jobs and make more money than non-degree professionals.
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Help your student build credit
Making loan repayments on time is an excellent way for the student to establish and demonstrate a good credit history.
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Cosigner early release option
After meeting qualifications including a credit check and 24 months of on-time payments, the student borrower may apply to have their cosigner released from the loan.
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Lower loan interest rates
Student loans with cosigners may qualify for lower interest rates than without a cosigner.
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Help your student complete their education
Some students have a hard time finding the funds to complete their education. By cosigning a student loan you are ensuring the student has the financial means necessary to graduate.
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What to do before cosigning a student loan
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Make sure the student has exhausted all forms of federal financial aid.
This is the very best option for student loans with the lowest rates and terms and does not require a cosigner.
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Has the student applied for scholarships and grants?
A wide variety of opportunities are available to explore, so offer to help your student research and complete scholarship and grant applications.
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Only borrow what is absolutely needed to pay for school tuition and expenses.
Private student loans are a last-resort and should only be used to cover necessary school expenses. Check with your school’s tuition calculator to see what they say is the total estimated expenses per semester.
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What cosigners should know
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It’s important to diligently monitor the student loan payments of your student.
Log in to the student loan payment portal to monitor that all payments are made on time.
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Explore all loan repayment options
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Different lenders offer different terms for repayment, if there is trouble making payments, explore all the options available.
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Cosigner early release options.
After making qualifying payments and passing a credit check, student borrowers maybe able to apply for a cosigner release.
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Loan discharged for student death or permanent disability
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In the event of the death or permanent disability of the student the loan will be discharged and you will be released.
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Top cautions about cosigning a student loan
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Cosigners are 100% equally responsible for repaying the loan
If the student is unable to repay the loan, the cosigner is equally responsible for repayments.
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Cosigning a loan will raise your debt-to-income ratio
This will show up on your credit report and could adversely affect your ability to take out additional loans.