How to remove a cosigner from a student loan by refinancing

Student loan refinancing is one option for removing a cosigner. (iStock)

Private student loans can close a funding gap for students who need to borrow to pay for a degree. According to MeasureOne's Private Student Loan Report, 91.25% of undergraduate loans were cosigned during the 2020-21 academic year.

Having a cosigner can make it easier to qualify for private student loans when you lack sufficient credit history to get approved on your own. However, becoming a cosigner can have financial implications for parents or guardians since they're equally responsible for the debt. The good news is there are ways to take the financial burden off your parents' shoulders if they cosigned on your behalf.

If you're ready to remove your student loan cosigner and fly solo, here's what you need to know.

Can I take a cosigner off my student loan?

In short: Yes, you can take a cosigner off your student loans. And there's one simple option: refinance.

"It's not too difficult to remove a cosigner from a student loan, but you will need to refinance," added Daniel R. Hill, certified financial planner and president of Hill Wealth Strategies in Richmond, VA. "Additionally, refinancing isn't difficult but it can require some time."

Student loan refinancing could be a good option when cosigned loans are owed to loan servicers that don't offer cosigner release. Cosigner release can allow you to remove a cosigner from your private student loans after making a set number of consecutive payments.

Student loan refinancing simply means replacing existing loans with a new private student loan. The proceeds from the new loan are used to pay off the old loan or loans. Going forward, you would make payments toward the new loan only. Refinancing student loans is different from consolidating them. If you owe federal student loans you can consolidate them into a single new federal education loan. This could streamline your monthly payments but it wouldn't result in lower rates.

If you have a private student loan you're considering refinancing, you can always use multi-lender marketplace Credible. With a private student loan refinance, you simply have to fill out one form to compare rates and access options from several lenders.


How to remove a cosigner by refinancing

If you're interested in refinancing private student loans to remove one or both of your parents as a cosigner, there are some things to keep in mind.

One of the most important things to consider is what your refinancing needs are, said Hill. Specifically, that means knowing how much you can realistically afford to pay and what loan term is sustainable for your budget. "There are different options your lender can speak to you about so be sure to fully share your financial situation," he said.

If you're ready to look for refinancing loans, start by checking your credit reports and scores. Most private student loan lenders will check your credit as part of the application process. You can compare your scores against the minimum credit score requirements with different loan servicers or lenders to see how likely you are to qualify.

Next, determine whether it makes sense financially to refinance student loans. A student loan refinancing calculator can help you estimate how much money you might save on interest. It can also help you gauge what your new monthly payments might be.

Finally, check your rates with different lenders before selecting a loan to see how much you might pay, based on your desired loan amount, loan term and credit history. Shopping around is a smart personal finance move when looking for the best loan refinance option. You can visit Credible to compare rates from multiple lenders without affecting your credit.


Pros and cons of student loan refinancing

Refinancing private student loans can offer several advantages to you as a borrower and to your parents if they cosigned.


  • Cosigner removal: A chief benefit of refinancing school loans for parents is being able to remove themselves from the loan as a cosigner. If you take out a new education loan in your name only, your parents would no longer be responsible for your student loan debt. 
  • Lower interest rates: On the borrower side, choosing to refinance student loans could allow you to take advantage of lower rates. That's an attractive benefit of student loan refinancing if you're interested in saving money over the long-term. With interest rates near historic lows, now could be a good time to consider a student loan refinance if you're focused on saving. 
  • Lower monthly payments: Refinancing student loans could also make loan repayment easier if it results in lower payments each month. This may be attractive if you're just starting your career and aren't earning a lot of money yet. Lower payments may be easier to manage in your budget. 

If you have private student loans and you're looking to refinance, shop on Credible for rates and lenders.



On the other hand, loan refinancing doesn't always make sense.

  • You could lose protections if you have federal loans: Refinancing federal student loans into private student loans would cause you to lose certain protections, such as grace periods, forbearance benefits and the option to choose income-based repayment.
  • You could have difficulty qualifying: It's also important to keep in mind that refinancing loans generally require sufficient credit history. If you're new to using and building credit, you may have a more difficult time qualifying for loan refinancing.