How to remove a cosigner from a student loan while saving money

By Ashley Billing | Published on May 29, 2026

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If you took out a private student loan to pay for college, you probably had a cosigner. It’s rare that undergrad students are able to qualify for private student loans on their own.

But now that you’ve graduated, your cosigner may have approached you to ask to be removed from your loan. Why? And how does it all work? Today we answer these questions and more.

What is a cosigner?

A cosigner is someone who agrees to pay your student loan if you can’t. In other words, they promise to make sure that any money owed on a loan gets paid—even if it means paying it back themselves.

Cosigners are often parents who help their children (the primary borrower) take out student loans for college when they need more funding than financial aid can cover, and they can’t qualify on their own. The parent agrees that he or she will pay the debt if at any point their college student cannot. While this can be helpful in some situations, there are times when removing a cosigner from a student loan might be necessary.

Reasons for releasing a cosigner

If your friend or loved one expresses an interest in being released from their responsibility as a cosigner on your student loan, don’t take it as an insult. It’s probably not because they don’t trust you to pay back the loan.

Instead, it’s more likely they’re going through a stage of life that requires them to operate with more financial security. Here are a few things to consider:

• If you miss a payment, their credit score is affected as well as yours. It may not seem like a big deal, but even a small drop in credit score could put your cosigner out of range of a lender’s best rates. If they’re trying to qualify for another type of loan, or even moving to a new apartment, for example, this could affect their ability to get approved.

• Your debt shows up in their credit profile. That’s right. Even though they’re not the primary borrower of the loan, your student loan debt is considered theirs as much as it is yours. That’s because they’re legally responsible to pay the loan back if you can’t. Carrying additional debt like this can make them a riskier borrower to other lenders by raising their debt-to-income ratio (DTI). If they’re trying to qualify for a mortgage, for example, your student loan debt could be the reason they’re not approved, or approved for less-than-ideal rates.

• They may no longer be as financially stable as they were when they agreed to cosign. When your cosigner agreed to pay back the loan in the event you can’t, they may have been in a totally different situation than they are now. Maybe they lost their high-paying job or got hit with an unexpected recurring expense (like medical bills or long-term care for an aging relative). Whatever it is, they may not feel comfortable taking the risk that they’ll need to pay back your loan.

How to remove a cosigner from a student loan

There’s more than one way to release a cosigner from your student loan. In some cases, you’ll have the option to apply for cosigner release built into your student loan agreement. In other cases, you’ll have to refinance your student loans.

Even if your lender does offer you the opportunity to release a cosigner, you may still want to refinance your loans. That’s because, in addition to enabling you to release a cosigner, a student loan refinance could help you save a significant sum of money over the life of your loan.

Option 1: Cosigner release

A student loan cosigner release is a provision in a student loan agreement that allows the borrower to remove their cosigner and become solely responsible for repaying the loan. Lenders have different requirements for what it takes to release a cosigner, but generally the borrower must make a certain number of consecutive on-time monthly payments. In part, this proves to the lender that the borrower is capable of making on-time payments without the help of the cosigner.

In addition, the borrower will need to have good credit (generally around 650+) and a steady income. Essentially, they will need to prove that they can qualify for the loan they currently have, but without the help of a cosigner.

While many legacy private lenders historically made these hard to get, Earnest now offers a streamlined cosigner release application process. This allows you to completely free your cosigner while keeping your exact same interest rate and loan terms.

Option 2: student loan refinancing

Student loan refinancing is the process of taking out a new loan to pay off your old student loans. This new loan will have new terms and a new interest rate. If you’re in better financial standing than you were when you originally took out the loan, you may qualify for a better interest rate.

Refinancing also allows you to change your loan from variable to fixed-rate (or vice versa), and release cosigners from your original loans (as long as you can qualify for the refinance loan on your own). You can even lengthen or shorten your repayment term depending on your goals.

As long as you’re able to qualify for the loan without the help of a cosigner, you’ll be able to relieve your old cosigner of their responsibility to repay your old loans if you miss payments, and you can potentially save money while you’re at it. A hard credit pull will be conducted if you move forward with an application to refinance.

What you should know about student loan refinancing

1. Student loan refinancing is not the same as student loan consolidation

Student loan consolidation is a way to combine all of your federal loans into one monthly payment under your existing loan servicer. This means you get to keep all the protections the federal government offers without needing to refinance with a private lender.

Consolidation only exists for federal loans, and it isn’t a way to save money over time. You won’t get a lower interest rate—when you consolidate your loans, you’ll get a new interest rate that’s a weighted of your existing ones rounded up to the nearest eighth of a percent. So, you may actually pay slightly more over time.

2. You can refinance either federal or private loans, or both

Whether you only have federal student loans or a mix including private student loan lenders, you can refinance some or all of your debt at any point in your repayment period. Sometimes, it’s wise to refinance only private loans, especially if you’re not feeling extremely financially secure. This way, you can continue to take advantage of benefits the federal government offers, such as flexible repayment options, the opportunity to request loan deferment if you fall on hard times, and forgiveness programs.

For example, if you join the Peace Corps or work as a teacher in a public school, you may be eligible for student loan forgiveness. The Public Service Loan Forgiveness program (also known as PSLF) offers federal debt forgiveness on your remaining loan amount after you make 120 qualifying payments on time.

The best way to figure out how to refinance your loans is to look at your interest rates. You may be offered a refinancing rate that’s lower than some of your existing loans, but higher than others. Unless you have another reason for refinancing—such as releasing a cosigner—it’s best to only refinance debt when you’ll save money with a lower interest rate.

3. Student loan refinancing allows you to change the type of loan you have

Refinancing your loans gives you an opportunity to switch from a fixed interest rate to a variable rate, or vice-versa.

Fixed interest rates are exactly what they sound like—they don’t change over time, regardless of how interest rates fluctuate in the market. The rate you’re offered is the rate you’ll pay for the duration of your loan repayment. The only way to decrease your interest payments is to pay off your loan faster than planned at the outset of your loan.

Variable interest rates go up and down based on the underlying interest rate. So they might be lower at first, but they carry the risk of increasing over time if market rates go up. Earnest allows borrowers in good standing to apply to refinance their loans up to every 30 days so that they can switch from a variable rate to a fixed one. Just beware that doing so requires a hard credit check, and you’ll have to meet credit requirements to be approved, so make sure you keep building your credit history and don’t let your score fall after you’ve secured your loan.

4. You can save thousands over the life of your loan by refinancing

The main benefit of refinancing a loan, regardless of why you’re doing it, is that you could save hundreds or even thousands of dollars over the life of the loan. Here’s an example of how your student loan payments could change if you refinance for a lower interest rate. For the purposes of this example, we’re looking at a 10-year, $20,000 loan.

Rates provided in the above table may not be representative of rates offered by Earnest. These are example rates for comparison purposes only. For current rates, please visit www.earnest.com.

5. By refinancing, you can lower your monthly payments, or choose to pay off your loans faster

Refinancing your loans gives you an opportunity to restructure your repayment plan to better suit your personal finance goals. For example, maybe you really want to focus on building up your emergency savings, so you need to lower your monthly payments. You can extend your loan repayment period in order to get lower monthly payments. While this will result in paying more interest over time, you may find that you’re ready to take on bigger payments in the future. Earnest lets borrowers set their automatic payments higher than the minimum required, so you can choose to pay down your loan faster later on by just paying more, without having to refinance.

Of course, you can also refinance for a shorter loan term so that you can pay off your loans more quickly. While this will increase your monthly payments, you’ll chip away at your principal balance much more quickly, thus saving you even more on interest in the long run.

Here’s an example of how that plays out when you refinance $20,000 of debt at a 6.8% interest rate for a 5-year repayment period instead of 10. We’ll use the same interest rate for both terms so you can see how the payment period factors in.

6. You can refinance with a cosigner if you need to

If you don’t quite meet eligibility requirements yet to refinance on your own, you can seek the help of another relative, mentor, or friend. Usually, cosigners have to be U.S. citizens or permanent residents. Just like your first cosigner, they’ll have to pass a credit check to prove there are no adverse marks on their credit report. The higher your cosigner’s credit score is, the lower your interest rate may be.

If this cosigner wants to be released later on—like your original cosigner wants to be released now—you can opt to refinance again in the future just like you’re doing now.

7. You can refinance as many times as you’d like

As we mentioned above, there are a number of reasons why you might want to refinance your loans. You may want to release another cosigner, for example. Or, as you build your credit history and decrease your debt-to-income ratio as you pay down your loans, you may become eligible for lower interest rates. If your situation changes for the worse, you could refinance for a longer loan term to lower your payments in lieu of going into forbearance.

There’s essentially no limit to the number of times you can refinance, as long as you continue to meet eligibility requirements.

Frequently asked questions (FAQ)

Can I use the Earnest Cosigner Release program instead of refinancing?

Yes! If you like your current interest rate and repayment terms but simply want to release your cosigner from legal responsibility, you can apply directly for the Earnest cosigner release program.

What if I don't qualify to release my cosigner or refinance on my own yet?

If you don't quite meet the independent credit or income requirements yet, you can choose to refinance your student loan with a new, different cosigner (like a spouse, relative, or mentor) who has a strong credit profile. This allows you to release your original cosigner immediately while you continue building up your personal credit history.

Is there a limit to how many times I can refinance my loans?

No. There is no limit to the number of times you can refinance your student debt. As your credit score improves or market interest rates drop, you can apply to refinance again to maximize your savings.