Cosigning a Student Loan: Pros and Cons | Earnest

Cosigning a student loan: pros and cons

By Corey Buhay | Published on July 8, 2026

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TL;DR

Table of contents

  1. Who can cosign a loan?
  2. Your options: Parent PLUS, cosigned loans, and private parent loans
  3. The pros of cosigning a private student loan
  4. The cons of cosigning a private student loan
  5. Cosigner FAQs

While federal student loans remain an affordable financing option for college, students can quickly hit the annual and aggregate borrowing limits. Private student loans can help fill the gap, but most private lenders require a solid credit history, which not all college students have. That’s where a cosigner can help. Here’s everything you should know about cosigning for a family member.

Who can cosign a student loan?

A cosigner is usually a parent or relative, but they don’t have to be. View our eligibility guide to learn about our cosigner eligibility requirements.

It’s best to cosign only if you have a strong relationship with the borrower. Once you put your name on the loan application, you’ll be responsible for the full loan amount should the borrower default.

Your options: Parent PLUS, cosigned loans, and private student loans

If you want to help your child with their college expenses, you have three main options:

Always fill out the Free Application for Federal Student Aid (FAFSA), even if you don’t think you’ll qualify for financial aid. The FAFSA isn’t just for student loans; it’s what the government, states, and colleges use to evaluate applications for grants, scholarships, and institutional aid.

Apply for a Parent PLUS Loan

If your child has maxed out their federal Direct subsidized and unsubsidized loans and needs more money to pay for school, a federal Direct Parent PLUS Loan is an option. This loan can be used to pay for your undergraduate student’s tuition, books, and any other supplies intended for educational purposes. They have fixed interest rates that are the same for all borrowers, regardless of credit and income. However, they also have the highest interest rates of all federal loans and a disbursement fee.

Starting July 1, 2026, Parent PLUS loans will have an annual cap of $20,000 per student, with a lifetime limit of $65,000. New borrowers will be limited to the new Tiered Standard Plan and will not have access to income-driven repayment (ICR) or the new Repayment Assistance Plan (RAP).

Remember, with a Parent PLUS Loan, you are the borrower of the student loan debt—not your child. That means you are solely responsible for making payments on the loan.

Cosign a private loan

When you cosign a loan, both you and your student share responsibility for the loan and payments. If you have a good credit score, you both may qualify for a lower rate on a private loan than with Parent PLUS Loans. Rates for private cosigned student loans tend to be more favorable than federal Parent PLUS loans.

With Earnest, cosigners can also borrow up to 100% of the school’s certified cost of attendance. Unlike federal loans, private loans don’t have the same benefits like income-driven repayment or loan forgiveness.

Apply for a private parent loan

A private parent loan is similar to a Parent PLUS loan; you are the sole borrower, but it's issued by a private lender rather than the federal government. This can be a good fit if you want to keep the debt in your name.

The tradeoff is that private parent loans don't offer federal repayment protections, but parents with strong credit profiles may qualify for rates lower than those of a federal PLUS Loan.

The pros of cosigning a private student loan

Being a student loan cosigner for your child has several advantages:

You improve your child’s chances of getting a loan

Private lenders usually don’t issue loans unless a borrower meets stringent income, debt-to-income ratio, and credit requirements. By acting as a cosigner, you increase their odds of qualifying for a loan. At Earnest, adding a cosigner improves odds of approval by five times.

You can help your child secure a lower rate

Adding a cosigner to their application increases the likelihood that your child will qualify for lower interest rates, reducing their monthly loan payments and saving money in the long run.

Your child could qualify for a larger loan

By cosigning, you ensure your child gets the full amount they need to pay for school.

Your child can build credit

Helping your child secure a loan allows them to start building their credit history. As they make regular payments, the lender reports their activity to credit bureaus, which can improve their credit score over time.

The cons of cosigning a private student loan

While cosigning offers advantages, be aware of these downsides:

You may be responsible for payments

As a cosigner, you’ll have to make payments if the primary borrower falls behind. It’s essential to have a plan in place.

Your credit score could be affected

If the primary borrower defaults or makes late payments, it can negatively impact your credit score.

The loan could affect your ability to qualify for other forms of credit

Cosigning increases your debt-to-income (DTI) ratio, which could hinder your ability to secure other loans.

Not all lenders offer cosigner releases

Some private lenders won’t allow for cosigner releases, requiring you to remain as a cosigner for the loan's term. You may want to consider refinancing as a way to release yourself from the loan.

Cosigner FAQs

Can I remove myself as a cosigner eventually?

Some private lenders allow cosigner removal, while others do not. The only way to remove yourself might be through refinancing.

Are there alternatives to cosigning a student loan?

Look into federal loans, scholarships, and grants first. These options don’t require a cosigner and can help bridge funding gaps for education.

How do I determine if I should cosign a loan?

Consider if you:

Conversely, you should avoid cosigning if you:

Are there private student loans that don’t require a cosigner?

Some loans are available for students with at least two years of credit history, but they might come with high-interest rates.

Find out how much you could save with Earnest

Cosigning a student loan can be beneficial, but impacts your finances. Assess your financial situation and explore loans with competitive rates, flexible terms, and options for cosigner release or refinancing.

You can check your eligibility for a private student loan or explore our student loan repayment calculator today.