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Bottom Line Up Front

  • Parents, relatives or trusted friends can co-sign your student loan to help you qualify or even get a lower interest rate.
  • Co-signers can sometimes be released from your student loan after a pre-determined number of on-time payments. 
  • It’s very common to have a co-signer: 9 out of 10 Navy Federal student borrowers have a creditworthy co-signer.

Time to Read

4 minutes

June 29, 2023

If you’re planning to go to college or grad school, you might be planning to take out a student loan to help pay for it, but you might lack the credit history to qualify for one. Even if you’re approved, you could get a higher interest rate because you haven’t had the chance to build your credit. This is where a co-signer can help.

What Does It Mean to Have a Student Loan Co-Signer?

Unlike federal student loans, which are based on information from your Free Application for Federal Student Aid (FAFSA), private student loans are approved based on your income and credit history. Having a creditworthy co-signer on your student loan can help you qualify more easily. A private student loan could also help you build your own credit when you make on-time payments.

A co-signer becomes jointly responsible for the student loan. This means they assume responsibility for paying off the loan on time along with you, the borrower. You can add a co-signer on multiple types of private education loans, including undergraduate and graduate loans and refinance loans. It’s very common to have a co-signer. In fact, 9 out of 10 Navy Federal student borrowers have a creditworthy co-signer on their loan.

Who Can Co-Sign a Student Loan?

Lots of times the co-signer is a parent, but it doesn’t have to be. Any legal adult can co-sign a loan, whether it’s a guardian, relative, spouse or trusted friend. The most important thing is that the co-signer is in good financial standing, has good credit (ideally 650+) and has consistent income. 

Both the primary borrower (you) and the co-signer are legally responsible for the full loan amount. If you stop paying back the loan, the co-signer will be required to pay. The loan will be reflected on both of your credit reports, and any missed payments could impact both of your credit scores. 

If you’re considering adding a co-signer to your loan, talk with them about a payment plan. Decide who will be responsible for making payments, how much each of you will pay and how you’ll handle any challenges. 

In order to have a co-signer on your loan, you’ll need to include the co-signer on the loan application. The co-signer will be contacted to complete the application with their personal and financial information, including their Social Security number and annual income. Once the loan is approved, both you and the co-signer will need to sign the loan agreement.

Benefits of Having a Co-Signer

There are numerous benefits to adding a co-signer to student loans, including: 

  • Qualify for the loan more easily

Banks, credit unions and other private lenders use credit history to see if a borrower qualifies for a loan. If you haven’t built up enough credit history, your loan might be denied. Adding a creditworthy co-signer to your loan can help you get approved.

  • Get a lower interest rate

If your co-signer has great credit, it makes your loan less risky to lenders. As a result, they may offer you a better interest rate, which can help you save on interest. 

  • Help build your own credit history

Having a private student loan gives you the opportunity to begin building your credit. Once the repayment period begins, you’ll begin to establish a strong credit history as long as you pay on time. This can help you qualify and get better rates for other loans in the future, like an auto loan or mortgage. 

Releasing a Student Loan Co-Signer

It could be possible to release your co-signer from your loan after a certain number of on-time payments, depending on your lender. When you release a co-signer, you’ll be solely responsible for repaying the loan moving forward.

The requirements for co-signer release will vary depending on your lender. Most importantly, you’ll need to prove you can afford to pay the loan on your own. This usually means providing proof of income and passing a credit check. If your loan is delinquent or if you have any loan defaults, bankruptcies or foreclosures, the release might be denied. 

As long as you meet the requirements, you can submit a release application through your loan provider. Navy Federal allows students to request a co-signer release after they make 24 consecutive, on-time principal and interest payments. Co-signers are unable to release themselves from the loan without the student’s consent.

Finance Your Education With Navy Federal

If you’re preparing to apply for student loans, consider the benefits and risks of co-signed loans. If there’s a creditworthy parent, relative or trusted friend who’s willing to co-sign your loan, you can increase your chances of approval and may get a more favorable rate in the process!

Navy Federal offers competitive rates on student loans and student or parent refinances. 

Next Steps Next Steps

  1. Consider your options to pay for higher education, including federal student loans, private loans, grants and scholarships. Determine how much you’ll need to borrow based on your school’s tuition and other costs, otherwise referred to as cost of attendance.
  2. Make a list of potential student loan co-signers, including your parents, guardians, relatives or trusted friends. Look for someone with a credit score above 650 and with a stable income. Have a conversation with them to see if they’d be willing to co-sign your loan and discuss how you’d navigate repayment.
  3. When you and your co-signer are ready,  check out our student loan options and fill out an online application in 5 minutes or less. 


This content is intended to provide general information and shouldn't be considered legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.