I Co-Signed for a Student Loan: How Do I Eliminate the Loan?

Co-signing a student loan makes you fully liable to repay the full debt if the primary borrower fails to do so. The student loan account appears on your credit report and any mistakes on the part of the borrower, including missed payments, can hurt your credit score. In addition, lenders consider the monthly payment as one of your liabilities in your debt-to-income ratio, which can impair your ability to qualify for a mortgage or another type of large loan. There are a few ways to have yourself removed as a co-signer, but they all require the cooperation of the student and lender.

Instructions

Co-Signer Release

1

Call the lender and ask what the co-signer release conditions are. These are the requirements that the primary borrower must meet before the lender will release you from the loan. For example, the primary borrower might have to make 24 consecutive on-time monthly payments and pass a credit check. If the borrower has met these conditions, proceed to the next step.

2

Ask the lender to send you a copy of the co-signer release form. Alternately, you might be able to download and print it from the lender's website.

3

Fill out the release form with the help of the primary borrower and submit it to the address on the form.

4

Remind the primary borrower to continue paying on time each month until the co-signer release goes through. A late payment while the lender is processing the application for release could cause it to be rejected.

Refinance Student Loan

5

Tell the student that you would like to be released from your responsibility as a co-signer and ask the student to refinance the loan.

6

Help the student find someone else to be a co-signer in your place. A friend or relative might be willing.

7

Research student loan lenders online and select one that refinances student loans at low interest rates.

8

Ask the student to apply for a refinance with the new co-signer. If the student has been managing credit for at least a few years, she could first try applying alone to see if she can qualify without having to drag a new co-signer into the loan.