Student Loans and Cosigners

Many student loan applications require a cosigner. A cosigner is a person who agrees to take responsibility for a loan if the borrower is not able to make the payments. A cosigner is used when the primary borrower does not have a long enough credit history or a high enough credit score to take on the loan by himself or herself.

What kinds of loans require cosigners?

Loans that are based on credit rather than on need often require a cosigner. These loans include alternative student loans and Federal PLUS Loans. Other federal student loans do not require cosigners because they are awarded based on a student's financial need and not on their credit.

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Who needs a cosigner?

There are a few different groups of students who are encouraged to enlist a cosigner in order to obtain a student loan.

• Undergraduate Students

  Most undergraduate students who apply for credit based loans will require a cosigner. Typically, lenders like their borrowers to have credit scores of 650 or higher. This is usually not the case for traditional college students because they have not had the time to build their credit history.

• Graduate Students

  Graduate students sometimes need a cosigner to be approved for a Graduate PLUS Loan. However, Graduate and Professional Student PLUS Loans do not base approval on debt-to-income ratio or credit score. Graduate students who have a good credit history and make payments on time should not need a cosigner. If a student gets denied without a cosigner they can reapply with a cosigner.

• International Students

  International private student loans also require cosigners. Both US citizens studying abroad and international students studying in the US need cosigners to be approved for these loans. Most international private student loans call for a cosigner who is a United States citizen in good credit standing.

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Who makes a good cosigner?

In most cases student borrowers have their parents cosign their loans. However, this is not an option for every student. If this is the case a student should choose another family member or adult friend who they trust. This person must have a good credit history and high credit score.

It is important that the cosigner knows that his or her credit rating will be affected by the loan. Cosigners cannot use the loan funds; their purpose is only to guarantee that any debt will be paid.