3 myths about cosigning, debunked

By Kaydee Ambas, CFEI® | Published on May 27, 2026

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Cosigning a student loan can help a student access better rates or qualify for funding they wouldn’t get on their own. But it’s also surrounded by confusion—and in some cases, misinformation.

Whether you’re a parent, guardian, or just someone helping out, here are three common myths about cosigning a private student loan—and the facts behind them.

Myth #1: Cosigning is just a formality

Truth: If the borrower misses payments, you’re responsible.

Cosigning isn’t just about helping someone qualify—it’s a legal agreement that makes you equally responsible for repaying the loan. If the borrower falls behind or defaults, you’re on the hook for the full amount.

That also means the loan will appear on your credit report and may affect your ability to take out other loans yourself.

Myth #2: Cosigning will ruin your credit

Truth: It can impact your credit—but not necessarily in a bad way.

The loan will show up on your credit report, and any missed payments could hurt your score. But if the student makes on-time payments, it may actually help your credit by demonstrating positive payment history.

The key is transparency—know what you’re signing, and make sure you’ll have visibility into how the loan is being repaid.

Myth #3: You’re stuck as a cosigner forever

Truth: You might be able to get released—but it depends on the lender.

Some lenders offer cosigner release after the borrower makes a certain number of on-time payments. But not all do—and approval isn’t guaranteed.

At Earnest, we do offer cosigner release that allows eligible primary borrowers to take full legal ownership of the loan, completely freeing the cosigner from financial liability while keeping the original loan terms intact.

As an alternative, we also allow borrowers to refinance their loan in their own name later on (subject to eligibility), to remove a cosigner. Unlike a standard cosigner release, refinancing replaces the old loan entirely with a brand-new one. This means the borrower can completely customize their new terms—potentially securing a lower interest rate, reducing the monthly payment, or choosing a shorter term to pay off the debt faster.

Bottom line

Cosigning can be a meaningful way to support someone’s education—but it’s not something to agree to blindly.

Make sure you understand what’s real and what’s just rumor, and ask the right questions before signing.

Learn more about Earnest private student loans

About the Author

Kaydee Ambas, CFEI®

Kaydee Ambas is a Certified Financial Education Instructor℠ and the Content Marketing Manager at Earnest, where she leads content strategy that empowers borrowers to make confident, informed decisions about student loans. With work published by outlets like MSN, Yahoo! Finance, and SoFi, she brings a deep commitment to educational, empathetic content. When she's not writing, you'll likely find her painting in Golden Gate Park.

Disclaimer

This blog post provides personal finance educational information, and it is not intended to provide legal, financial, or tax advice.