What to do if you’re denied a student loan with a cosigner

By Robyn Kurdek | Published on February 16, 2026

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When you’re denied a student loan due to a low credit score or bad cosigner, it can throw your college plans into disarray. Luckily, there are steps you can take that may help you to get approved for the loan you need.

If you’ve been denied a private student loan

It’s not uncommon to be denied a private student loan if you applied on your own. Most students lack the credit history needed to qualify for a sizable loan without a cosigner. At Earnest*, students are 5X more likely to be approved with a cosigner, but if you’ve still been denied, here are a few things you can do.

Make sure you’ve filled out your FAFSA

Most students rely on loans to pay for college, but loans have to be paid back with interest. That means they’ll end up costing more than the original amount borrowed.

On the other hand, financial aid is money you don’t have to pay back. It comes from a variety of sources: federal government programs, state government programs, and college or university scholarships and grants.

If you’re planning on going to college, it’s important that you fill out the Free Application for Federal Student Aid (FAFSA) as soon as possible after January 1st each year. The FAFSA will determine your eligibility for financial aid based on your income and assets as well as other factors, such as whether your parents are divorced or separated, or if there are other children in your household attending college.

Once you know how much aid you’re eligible for based on income and other factors like household size and family assets, then you can start figuring out how to pay the rest of your tuition bill.

Apply for scholarships and grants

Another option that doesn’t involve taking out a loan is applying for scholarships and grants.

Like financial aid, scholarships and grants are free money that isn’t based on income or credit score, so they’re perfect if you’ve been denied a traditional student loan because of bad credit or otherwise.

There are lots of scholarships out there for people with all sorts of backgrounds, interests, and intended fields of study— and they’re easier than ever to find. The more money you earn in scholarships and grants, the less debt you’ll have when you graduate college.

Take out as much in federal loans as you can

If you’ve exhausted all options for free money, your next step is applying for federal loans. Federal loans are overseen by the U.S. Department of Education, don’t require a cosigner, and have more flexible repayment options than private loans. They also come with borrower protections that private lenders aren’t required to provide, like income-driven repayment plans and loan forgiveness options if you work for certain nonprofit organizations after graduation.

Finally, federal loans all have fixed interest rates — which means they’ll never rise over the life of your loan — making it easy to form a plan for repayment and adhere to it. There are four types of federal student loans, and each offers specific advantages:

• Direct Subsidized Loans:

  • Offer fixed, possibly lower interest rates than many private lenders
  • Eligibility is based on financial need
  • The federal government may cover interest payments when you’re enrolled in school part-time, during the six-month grace period after you leave school, and during deferment periods
  • No credit check required
  • Eligible for borrower protections, like income-driven repayment plans and loan forgiveness programs, such as Public Service Loan Forgiveness (PSLF) under certain conditions

• Direct Unsubsidized Loans:

  • Available to graduate and undergraduate students
  • Interest rates are the same as Direct Subsidized loans for undergraduates (may be higher for graduate students)
  • Eligibility is not based on financial need
  • Repayment and forgiveness program eligibility is the same as Direct Subsidized loans
  • Repayments are deferred until after you leave school or enroll less than half-time
  • No credit check required

• Direct PLUS Loans:

  • Graduate or professional students are eligible for Grad PLUS loans; parents of dependent undergraduate students may qualify for Parent PLUS loans
  • Their purpose is to supplement education costs if you’ve already borrowed the maximum limits on Direct Subsidized and Direct Unsubsidized loans
  • Borrowers with an adverse credit history may qualify with a cosigner
  • No payments are required on Grad PLUS loans for students enrolled at least half-time or during the six-month grace period after leaving school; Parent PLUS borrowers can apply for deferment during these periods
  • Grad PLUS borrowers may qualify for income-driven repayment plans or PSLF; Parent PLUS borrowers may be eligible for an extended repayment or income-contingent repayment plans with federal loan consolidation

• Direct Consolidation Loans:

  • Borrowers can combine all eligible federal loans into one loan (usually after leaving school)
  • No loan application fee
  • Eligible for income-driven repayment plans and other forgiveness programs
  • Provides one, potentially lower monthly payment with a single loan servicer

Apply with a cosigner

If you’ve been denied a student loan, reapply with a cosigner. A cosigner is someone with good credit who agrees to be legally responsible for your debt if you fail to repay it. This can help make sure that the lender is protected, which makes you a less risky investment, and improves the likelihood you get approved for the loan.

Cosigning is only an option if someone else is willing to be responsible for paying back your private student loan if you can’t. So if you ask someone, make sure they understand the risks. If you miss payments, it could negatively affect their credit score, and if you default, the lender can come after them for what you owe. What’s more, the cosigner will be adding debt to their credit profile, which can make it harder for them to get approved for other types of loans in the future.

Improve your credit

If you’re set on taking out a private student loan without any help, the best thing to do is improve your credit. This includes establishing a credit history and making sure you have a good FICO score, which means that the majority of your accounts are in good standing (i.e., not delinquent or past due).

Lenders have varying definitions of a “good” credit score. Some will allow you to take out a loan on your own if your score is above 670, while others might require a score above 700 or even higher. If your credit score is lower than that, you might have a hard time qualifying for a student loan without a cosigner.

If you’ve been denied a private student loan with a cosigner

Find a new cosigner in a better financial situation

If you’re denied a student loan because of your cosigner’s credit score, income, debt-to-income ratio, or length of employment history, don’t give up hope. It’s time to find a new cosigner. The best thing you can do is find someone with a high credit score who has a low debt-to-income ratio (meaning their debt is a small percentage of their income). If the person has been in their job for at least two years, that’s an added bonus. Keep in mind, when you find a new cosigner and apply for a loan again, it will trigger another hard credit pull on your report.

Establish a credit history

If you’ve been denied a student loan because of your cosigner’s poor credit history, one way to prove your own creditworthiness is by establishing your own credit history. To do this, consider opening a line of credit or getting added as an authorized user on a family member’s credit card.

To establish a good track record with your new account, try to:

• Make only small purchases on the card while paying off the balance in full every month
• Avoid closing any accounts; if necessary, keep them open but don’t engage in any activity that could adversely affect their scores
• Try to limit opening new lines of credit

With a high enough credit score, you may find that lenders approve you for a private student loan without a cosigner.

Consider taking out a smaller loan

If you’re denied a loan, consider taking out a smaller loan. The bigger your loan amount is, the riskier you appear to lenders. If you need to finance a significant sum, consider taking out multiple smaller loans rather than one large one, and make a plan to refinance once you get out of school and your financial situation is better.

Refinancing your student loans can make payments simpler by lumping all your loans into one loan. It works like this: You apply for a new loan with a new lender, and if you’re approved, use that loan to pay off all your old loans. Then, you make payments to that new lender, which means you have only one monthly payment and one lender to deal with each month.

Student loan refinancing is often done when the borrower is in better financial shape because better financial shape usually means better credit, which translates to a lower interest rate from the lender. So not only could you eventually refinance your loans to simplify your payments, but you could likely get a reduced interest rate, which could save you thousands over the life of your loan.

How to find a cosigner

A cosigner can be any US citizen or permanent resident who is the age of majority in their state. Whoever you choose should be more financially stable than you. This makes you a less risky investment for the lender, because they know that if you do default on the loan, there’s someone else they can collect the debt from. Here’s how to identify a good replacement cosigner:

A good cosigner will be ready and willing to support you

A cosigner doesn’t have to be your parent, but it is most common for them to be. For example, if your parents are unable to cosign on a student loan with you because they owe too much in student loans themselves and/or have poor credit scores that would prevent them from being qualified as an endorser, then they might ask a grandparent or sibling who has good credit history if they’re willing to help out by serving as a cosigner instead.

Your cosigner should also understand that taking on this responsibility will mean having their own finances affected negatively if something goes wrong. If you miss payments, their credit score will take a hit, and if your loan goes into default, the lender has the right to collect the debt from both you and your cosigner. Though your cosigner can be virtually anyone, they should be someone you trust who is ready and willing to step in if you can’t make payments for any reason.

A good cosigner will have good credit

A good cosigner will be someone who has a score of 700 or higher on the FICO scale (the most common credit scoring model), but there are other factors that play into this as well. It helps if the cosigner has had an account open for at least six months in good standing—a credit card or even an auto loan will work just fine if it’s paid off consistently on time with no negative marks against it. The ideal scenario would involve having multiple accounts open over several years with no late payments or missed payments whatsoever, but again: Don’t worry too much about getting everything perfect right away; any improvement from where you’re at now is better than none at all.

A good cosigner will have a low debt-to-income ratio

Debt-to-income ratio is simply the amount of debt you have compared to your income. The lower this number, the better. A good cosigner should have a low debt-to-income ratio, which means they have less than 43% of their income going toward bills and debts. If you don’t meet the credit requirements and are denied student aid due to a high DTI ratio, find someone who does (or try again with another lender, but remember – every time you apply, it will trigger a hard credit check).

How to prove to your cosigner that you’re a responsible borrower

Once you find a cosigner, they may need help being comfortable that they can count on you to hold up your end of the commitment. Here are some ways to demonstrate to your cosigner that you’re financially responsible:

• Make a plan to refinance: Most college students don’t yet have good credit and income records. Explain to your cosigner that you plan to build your credit and income history, and that you intend to refinance when your financial situation improves.

• Share your budget: Create a budget that details your income, existing debts, and other financial obligations. Show your cosigner how you’ll make your loan payments and cover your existing bills.

• Put it in writing: Outline your contingency plans for loan repayment, even if your financial situation changes. What will you do if you lose your job or get hit with unexpected bills, for instance?

• Aim for cosigner release: Discuss a plan for releasing your cosigner from the loan sooner than later. The clearer you are about the steps you’ll take, the more comfortable your cosigner is likely to be. To qualify for cosigner release, you’ll need to meet certain lender requirements, like graduating college, getting a job, establishing good credit, and consistently making on-time payments for at least one to three years. Keep in mind, not every lender offers a cosigner release. Check with yours before you apply.

• Be honest about the risks: Make sure your cosigner understands their legal obligation, and be honest about the risks involved, such as potential damage to their credit if you fail to repay the loan on time.

Can you get a private student loan without a cosigner?

Because students typically lack a strong credit history of their own, more than 90% of private student loans have a cosigner. Nonetheless, it is possible to qualify for a private student loan without one if you have good credit and a stable income and employment record.

Still, the interest rates on private student loans without a cosigner are likely to be on the higher side, especially for borrowers with spotty credit histories.

If You’ve Been Denied with a Cosigner, Don’t Give Up

Considering the high cost of college, you may need to consider more than one funding source to pay for your education. First, fill out the FAFSA to determine your eligibility for grants, scholarships, and government programs.

Applying for grants and scholarships is the next logical step, along with taking out as much in federal student loans as you can. If you still need additional money to cover college costs after exhausting these funding options, consider private student loans.

In that case, you may need a cosigner. If you’re denied due to a cosigner’s poor credit score or other factors beyond your control, don’t give up. Find a more creditworthy cosigner, or consider applying on your own. Make sure to plan for unforeseen snags as early as possible so you don’t miss important funding deadlines.