Reluctant Cosigner? There’s a solution for that. | 09.22.10

Posted in Private Student Loans By Evan Jacobs

The most common things we see in our Financial Aid Forum every day is, “what loans can I get without a cosigner?” or “My parents don’t want to cosign because they don’t want another loan over their head.” It’s a prevalent and enduring problem, made worse by the economy and anxiety about job security.

However, the reality of the situation is the fact that most students simply can not afford college without the help of student loans. In some cases, federal student loans can be enough to cover your tuition (mostly for in-state public schools or two-year institutions), but affording private college and out of state schools can be much more difficult.

As I mentioned earlier this week in a blog about saving money through loan repayment incentives, there are a lot of different rewards, benefits, and marketing techniques that private lenders use to try and prove their product is better than the competitor next door. However, one benefit that I didn’t mention that has become popular lately is cosigner release.

Cosigner release basically means that once you graduate from your degree program, you can request to have whomever cosigned on your loan released from their financial obligation. This is big. Cosigner release makes all of those “I don’t want to be ‘on the hook’ for your loan” arguments invalid, assuming you make sure to finish school of course.

If you’re interested in checking out who offers this, have a look at our private lender comparison tool. It lists some popular lenders and their various perks and quirks for student loan offerings. As always, I recommend going federal before going private, but cosigner release definitely makes the prospect of a private student loan less uneasy for whomever you ask to help pay for school.

If you have a co-signer ready to go, apply for a private student loan today!

ScholarshipPoints Code: COSIGNRELEASE

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85 Responses to “Reluctant Cosigner? There’s a solution for that.”

  1. Derek Summers says on February 7, 2012 at 8:34 am:

    Nicely described post about a cosigner release, but I have a question. if a student finds it difficult to pay a private student loans without cosigner due to some financial hardships, what are the options should the student is supposed to avail.

    Reply To This Comment
    • Student Loan Guru says on February 9, 2012 at 3:24 pm:

      If a student is having difficulty making payments, they should talk to their lender ASAP. There are usually forbearance or deferment options, or even repayment plans the lender can offer.

      Reply To This Comment
  2. Military Education says on June 10, 2011 at 3:29 pm:

    Federal funding is harder to get these days and I would recommend looking for colleges that offer good payment plans over Title IV funding. Most schools offer zero financing. If you are in or have been in the military as your school about the GI Bill. Hope this helps.

    Reply To This Comment
  3. Alexia Rudolf says on May 30, 2011 at 4:22 am:

    thanks, that was a great help!

    Reply To This Comment
  4. Alexia Rudolf says on May 16, 2011 at 7:43 am:

    Nice Article on student loans. I would like to know how much amount does a student can get from the federal student loans programs without having a cosigner and for how much time duration.

    Thanks in advance!

    Reply To This Comment
    • Student Loan Guru says on May 16, 2011 at 8:14 am:

      @Alexia- Since the federal student loans are based on need and not credit, the amount a student can be eligible for varies greatly. Most federal loans go into repayment 6 months after the end of school and again, the duration varies depending on the amount of the loan and what your average monthly payments are. If you’re interested in calculating your monthly payments, CollegeToolKit.com has a College Loan Repayment Calculator that may help!

      Reply To This Comment
  5. Student Loan Guru says on January 4, 2011 at 12:23 pm:

    @David R: Lender offerings are constantly changing. It is always worth it to check for this option amongst the lenders once you see a list of lenders that will work with your school. Even if a student has trouble within the first year, the co-signer could help them out for that portion so that they can be removed from the loan. Overall, a few hundred dollars will be less than the loan total if the student defaults in the future.

    Reply To This Comment
    • abigail awode says on January 4, 2012 at 9:45 pm:

      Are there any websites or people out there who would be generous enough to cosign a private student loan for a student if their parents and their family can not cosign for them.

      Reply To This Comment
  6. David R. says on December 27, 2010 at 2:19 pm:

    As the above commentors note, few lenders actually offer this option, and even when they do, the release requires the borrower to complete at least a year of repayment (most defaults occur within one year). If it’s too good to be true, it probably is.

    Reply To This Comment
  7. susan says on December 26, 2010 at 6:25 pm:

    is a fafsa required to get a staford loan? Doing the fafsa4caster, the most my child can get is 5500 in a staford, so do we still have to complete the fafsa?

    Reply To This Comment
    • Student Loan Guru says on December 27, 2010 at 4:07 pm:

      @susan: The fafsa4caster is just a tool that helps you estimate the aid you will receive. After Jan 2nd, you’ll have to fill out the FAFSA form to actually submit your information to the government.

      Reply To This Comment
    • Ronell says on January 18, 2011 at 4:25 pm:

      Yes, completing the FAFSA is required to get a Stafford Direct Loan. $5500 is the maximum amount a dependent student can receive. They can get $2000 additional unsubsidized loan from that program also.

      Reply To This Comment
      • Ayisha says on November 21, 2011 at 2:51 pm:

        Hello,
        I was wondering…in regards to the additional $2000 one student can receive from the stafford already $5500…does the financial offficer at the college (usually) inform the student of this or does the student have to mention this opportunity on a need to know basis. I am finding it very hard to get finance assistance and my school only informed me of the basics and it is all my responsiblity. It is a private school and I work full time with part time (community college) attendance…getting close to start date for my RN program and no way to pay…..please reply…Ayisha

      • Student Loan Guru says on November 23, 2011 at 11:25 am:

        Hi,

        It really depends on the financial aid office, but if your parents were denied a PLUS loan due to credit, I would contact your financial aid office to request the extra funds. Better to stay ahead of the game!

  8. thomlyn bowman says on October 28, 2010 at 1:12 pm:

    This is really helpful and interesting

    Reply To This Comment
  9. asdfgh says on October 26, 2010 at 7:22 pm:

    Great info! This helped alot!

    Reply To This Comment
  10. drbryan says on October 23, 2010 at 3:41 pm:

    Interesting.

    Reply To This Comment
  11. Taylor says on October 22, 2010 at 4:45 pm:

    Awesome thank you!

    Reply To This Comment
  12. agustin says on October 18, 2010 at 10:33 pm:

    good info!

    Reply To This Comment

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