Do You Need a Cosigner for a Student Loan for 2025?

by Alex Hillsberg , MA

Student Finance & Loan Expert

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As an educator and researcher, I understand the financial challenges students face. For 2025, many students wonder if they need a cosigner for their student loans.

According to data from the 2023 to 2024 school year, 93% of undergraduate private loans are co-signed. This article explores the necessity of a cosigner and offers practical advice. By reading this, you'll learn how cosigners impact loan approvals and interest rates, helping you make informed decisions about your education funding.

Key Things You Should Know About a Cosigner for a Student Loan

• The typical sources of funding for one academic year of education include parent contribution at 39.54%, college savings plan at 11.07%, scholarships and grants at 24.95%, student loans at 10.64%, and student income and savings at 8.05%.
• For 2025, a total of $167 billion in student loans were forgiven, benefiting 4.75 million borrowers.
• 34.40% of cosigners reported that their ability to qualify for mortgages, auto loans, or other types of financing was negatively impacted.
• Approximately 35% of individuals who acted as cosigners expressed regret over their decision to cosign on a private student loan.
• Scholarships and grants can help avoid the need for a cosigner when financing education, as they provide funds that do not need to be repaid. This independence from loans and cosigners can alleviate financial stress and empower students to pursue their educational goals without worrying about repayment obligations.

 Table of Contents

1. Do you need a cosigner for a student loan for 2025?
2. What are the responsibilities of a cosigner for a student loan?
3. How does having a cosigner affect your student loan terms and interest rates?
4. Can a cosigner be released from a student loan?
5. What happens if a cosigner cannot repay the student loan?
6. What are other ways to improve your chances of loan approval without a cosigner?
7. How can part-time work impact your ability to secure a student loan?
8. What are my options if I have a poor credit history?
9. What are some alternatives to student loans for financing education?
10. How can scholarships and grants help avoid the need for a cosigner for a student loan?
11. Can choosing the right college major reduce your need for a cosigner?
12. Can accelerated associate degrees reduce the need for a cosigner?
13. What regulatory developments should cosigners monitor for potential changes?
14. What should you consider when comparing student loan offers?
15. How can cosigners for student loans protect themselves financially?
16. How can choosing the most affordable online bachelor's degree lower your need for a cosigner?
17. How does pursuing professional-specific loans benefit students without cosigners?
18. How can alternative career training reduce your reliance on student loan cosigners?
19. What are the tax implications of cosigning a student loan?
20. How can improving your credit score help secure a cosigner-free loan?
21. Other Things You Should Know About Needing a Cosigner for a Student Loan

Do you need a cosigner for a student loan for 2025?

You will need a cosigner for a student loan in general if:

• You have no or low income
• You have poor credit
• You're borrowing beyond your credit score limit

Here are some scenarios where you might or might not need a cosigner for your student loans:

Federal Student Loans

If you've looked up "What is Title IV funding?" you'll know that you do not need a cosigner for federal student loans. These loans, such as Direct Subsidized and Unsubsidized Loans, are based on financial need and do not require a credit check or cosigner.

However, PLUS Loans, which are available to graduate students and parents of undergraduates, do require a credit check. Even if you have adverse credit history, you might still be able to get the loan with an endorser (similar to a cosigner) or by documenting extenuating circumstances.

Private Student Loans

Many private lenders require a cosigner, especially for undergraduate students, due to their limited credit history and income. A cosigner with a strong credit history can help secure a loan at a lower interest rate. However, some lenders may offer loans to students without a cosigner if they have a strong credit profile and sufficient income.

Credit History 

If you have a strong credit history and a stable income, you may qualify for private student loans without a cosigner. Young students often lack these financial qualifications, making a cosigner necessary.

Low or No Income

Students usually don’t have a lot of income, especially if they’re studying full-time. Lenders prefer to give loans to people who have a steady income so they can be sure the loan will be repaid. A cosigner with a stable income can help meet this requirement.

What are the responsibilities of a cosigner for a student loan?

Being a cosigner on a student loan involves more than just signing a piece of paper; it means taking on a shared commitment to repay the loan if the primary borrower (the student) cannot. Here are the key responsibilities a cosigner should be aware of:

Repayment Obligation

If the student cannot make the loan payments, the cosigner is legally obligated to repay the loan. This includes both the principal amount and any accrued interest. The cosigner is responsible for the entire amount of the loan, not just a portion of it.

Impact on Credit

The loan will appear on both the student’s and the cosigner’s credit reports. This means any late payments or defaults will affect the cosigner’s credit score. The loan amount is considered in the cosigner’s overall debt load, which can affect their ability to obtain other loans or credit.

Financial Stability

Taking on the responsibility of a student loan affects the cosigner’s debt-to-income ratio, potentially limiting their borrowing capacity for other needs, such as buying a home or a car. The cosigner may need to adjust their budget to accommodate potential loan payments if the student cannot pay.

Communication and Monitoring

The cosigner should stay informed about the loan status, payment schedule, and any potential issues with repayment. It’s important to encourage the student to make timely payments and to communicate openly about any financial difficulties they might encounter. Cosigners may also have useful tips on how to budget allowance for students.

Potential Legal Action

If the loan goes into default, the lender can take legal action against both the student and the cosigner. This can include wage garnishment and other collection efforts. The cosigner is legally liable for the debt, meaning the lender can sue them for repayment if necessary.

Loan Release Options

Some loans offer a cosigner release option, where the cosigner can be removed from the loan after the student makes a certain number of on-time payments and meets other conditions. Refinancing the loan in the future might also be an option to release the cosigner, but this depends on the student’s financial situation and creditworthiness.

Here's What Graduates Have to Say About Having a Cosigner for Student Loans

"Having my dad as a cosigner for my student loan was a huge help. Not only did it help me secure funding for my education, but it also gave me peace of mind knowing he had my back. Thanks to his support, I was able to focus on my studies and graduate with confidence." - Violet

"I'll forever be grateful to my aunt for cosigning my student loan. Her belief in my potential not only helped me finance my education but also motivated me to excel academically. With her support, I was able to pursue my dreams and graduate with honors." - Tess

"Cosigning with my older brother was the best decision I made for my education. His guidance not only provided me with financial assistance but also served as a source of inspiration throughout my college journey. Thanks to him, I was able to graduate debt-free and embark on my career." - George

How does having a cosigner affect your student loan terms and interest rates?

Having a cosigner can greatly improve the terms and interest rates of your student loan. Lenders look at your credit history and income to decide if you can repay the loan. Many students don’t have a strong credit history or much income, which makes them risky to lend to. This can lead to higher interest rates and lower loan amounts. A cosigner with good credit and a steady income makes the lender feel more confident about getting repaid.

One of the biggest benefits of having a cosigner is getting a lower interest rate for student loans on bachelor's degrees and master's programs. Interest rates are based on how risky it is to lend money to someone. A cosigner with a good credit score reduces this risk, so lenders are more likely to offer a lower rate. This means you’ll pay less interest over the life of the loan, saving you money.

Additionally, a cosigner can help you get better loan terms besides just the interest rate. You might be able to borrow more money, which can help cover your education costs. You might also get more flexible repayment options, like longer time to repay the loan or the ability to pause payments if needed. These benefits make it easier to handle loan repayment, reducing financial stress while you’re in school and after you graduate.

Can a cosigner be released from a student loan?

Yes, a cosigner can be released from a student loan, but it depends on the lender's specific rules. Many private student loan lenders allow cosigner release after the student has made a certain number of on-time payments, usually between 12 to 48 months. The student also needs to show they can handle the loan on their own by having a good credit score, stable income, and low debt compared to their income. The lender will check the student’s financial situation to make sure they qualify.

To apply for cosigner release, the student needs to submit a formal request to the lender. The lender will review the student’s credit history, job status, and overall financial health to decide if they meet the requirements. It's important for the student to keep their credit in good shape and maintain a steady income to improve their chances of approval. Some lenders might also require proof that the student has graduated or completed their academic program.

If the cosigner release is approved, the cosigner is no longer responsible for the loan, and it is removed from their credit report. This can improve the cosigner’s credit score and financial situation, allowing them to take on other financial commitments without worrying about the student loan.

However, if the student doesn’t meet the requirements, the cosigner remains responsible for the loan until it is fully paid off. It’s important for both the student and the cosigner to understand the process and work towards meeting the necessary criteria.

What happens if a cosigner cannot repay the student loan?

If a cosigner cannot repay the student loan, it can lead to serious financial consequences for both the cosigner and the primary borrower. Firstly, the loan will be considered in default if neither the student nor the cosigner can make the payments. Defaulting on a loan can significantly damage the credit scores of both the cosigner and the borrower, making it difficult for them to obtain future credit, secure housing, or even get certain jobs. The default will remain on their credit reports for several years, impacting their financial health and opportunities.

Additionally, the lender may take legal action to recover the debt, which can include garnishing wages, seizing assets, or placing liens on property. This can further strain the cosigner's and the borrower’s financial situations. The debt can also be sold to a collection agency, resulting in persistent collection efforts and additional fees.

Therefore, it’s crucial for cosigners to fully understand the risks involved and for both parties to have a plan in place to manage repayments to avoid these severe consequences.

To help you plan for college expenses, the chart below shows the typical education funding sources for one academic year: 

What are other ways to improve your chances of loan approval without a cosigner?

While a cosigner can simplify the student loan process, it's not mandatory. Here are effective strategies to strengthen your loan application and increase your chances of approval without a cosigner:

• Establish a history of saving money. Lenders value financial responsibility. Create a budget and show a history of saving, even small amounts. Bank statements or savings account records can provide this evidence.
• Have a steady source of income. Having a part-time job or doing summer work can also strengthen your application. This demonstrates financial responsibility and makes you less risky as a borrower.
• Maintain good grades. Good academic performance goes beyond just grades. It reflects focus, dedication, and potentially, a higher future earning capacity to repay the loan. This can be particularly beneficial when applying for private loans.
• Borrow only what you need. Resist the urge to borrow the maximum amount. Only take out what's absolutely necessary to cover your educational expenses. Remember, student loans are long-term debt, and you'll be responsible for repaying them with interest.
• Shop around for favorable terms. Don't accept the first loan offer you see. Compare interest rates, fees, and repayment terms from multiple federal and private lenders. Research lenders known for being flexible with students who don't have a cosigner.

How can part-time work impact your ability to secure a student loan?

Balancing part-time work with your studies can positively impact your ability to secure a student loan and manage repayment. Here's how a job can make a difference:

• Improved Creditworthiness

Many lenders require proof of steady income to qualify for student loans without a cosigner. A part-time job can provide you with stable earnings that demonstrate financial responsibility, making your application more attractive. Over time, maintaining a consistent income may also help you build a better credit score.

• Reduction in Borrowed Amounts

By earning an income, you can reduce your dependence on loans by covering smaller personal expenses like books, food, or transportation. For example, combining part-time work with scholarship funds and affordable options like the best part time student loans can help minimize the total borrowed amount.

• Establishing Financial Discipline

Working part-time instills budgeting habits that not only support your current financial needs but also prepare you to responsibly manage loan repayments in the future. Regular budgeting ensures that borrowed funds are allocated primarily to essential educational costs.

• Networking Opportunities

Some part-time roles, especially on-campus or field-relevant jobs, can lead to networking opportunities, internships, or even full-time employment—further boosting your financial independence and reducing your reliance on loans.

Carefully selecting a manageable and supportive part-time job will allow you to meet your academic goals while reinforcing your financial stability.

What are my options if I have a poor credit history?

If you have adverse credit, several specialized loan programs are available that consider factors beyond your credit score. For example, some lenders design products specifically for students with limited credit history, and options like bad credit student loans are tailored to accommodate lower credit scores while still offering competitive terms. Evaluating these targeted loans alongside federally subsidized options and alternative funding sources can help you secure financing based on academic potential and future earnings rather than solely on credit history.

What are some alternatives to student loans for financing education?

There are several alternatives to student loans for financing education, each with its own benefits and considerations:

• Scholarships and grants. Scholarships and grants are funds awarded to students based on various criteria, such as academic achievement, financial need, or extracurricular involvement. Unlike loans, scholarships and grants do not need to be repaid, making them an attractive option for financing education without accumulating debt.
• Work-study programs. Work-study programs offer students the opportunity to work part-time jobs, often on campus, to earn money to cover educational expenses. These programs provide valuable work experience while helping students offset the cost of tuition and other fees.
• Employer tuition assistance. Some employers offer tuition assistance or reimbursement programs as part of their employee benefits package. This benefit can help employees pursue further education while continuing to work, reducing the need for student loans.
• Savings and investments. Saving money in advance or utilizing investments, such as 529 college savings plans or Coverdell Education Savings Accounts (ESAs), can help families prepare for educational expenses. By starting to save early and consistently, families can reduce reliance on loans to finance education.
• Crowdfunding and community support. Crowdfunding platforms and community-based initiatives can be used to raise funds for educational expenses. Students can create fundraising campaigns to solicit support from friends, family, and community members who are willing to contribute towards their education.
• Income share agreements (ISAs). ISAs are financial agreements where students receive funding for education in exchange for a percentage of their future income for a specified period after graduation. ISAs offer an alternative to traditional loans, as repayment is tied to post-graduation income levels.
• Military service and ROTC programs. Military service and Reserve Officer Training Corps (ROTC) programs offer educational benefits, including tuition assistance, scholarships, and stipends, in exchange for service commitments. These programs can provide financial support for education while also offering valuable training and career opportunities.

The following chart outlines sources of scholarship and grant funds available to students covering college expenses:

How can scholarships and grants help avoid the need for a cosigner for a student loan?

Overall, having a scholarship is a positive factor when applying for a loan without a cosigner. First, it shows lenders you're proactive in reducing your loan dependence. This translates to a lower overall borrowing amount, making you a less risky borrower.

Second, scholarships are often merit-based, rewarding academic excellence or community involvement. This can be interpreted as a sign of responsible financial behavior, a quality lenders highly value.

Finally, a partial scholarship strengthens your loan application by showcasing a diversified approach to financing your education. It demonstrates you're utilizing various funding sources, making you a potentially more attractive borrower to lenders. 

According to educational data, 63% of all undergraduates receive at least one grant or scholarship. Partial scholarships are much more widely available compared to full-ride scholarships. Many universities and colleges offer partial scholarships to a broader range of students based on academic merit, financial need, specific talents, or involvement in extracurricular activities. 

Meanwhile, due to their more generous nature, full-ride scholarships are highly competitive. Universities often award only 5 to 10 of these scholarships per year.

Can choosing the right college major reduce your need for a cosigner?

Selecting a college major that aligns with strong job market trends and clearer career pathways can help lower the overall borrowing burden and reduce the perceived risk for lenders. Students who research industry demands and opt for programs with stable employment prospects may secure funding under more favorable terms—potentially minimizing or eliminating the need for a cosigner. Insights into program difficulty and market entry can further guide your decision-making process; for example, consider reviewing What is the easiest degree to get? to identify majors that balance academic rigor with career readiness without disproportionately increasing your loan requirements.

Can accelerated associate degrees reduce the need for a cosigner?

Enrolling in an accelerated program can lower overall educational expenses by shortening the degree duration. This cost-effective approach decreases the total borrowed amount, potentially reducing the risk perceived by lenders. With a streamlined curriculum, students may enter the workforce sooner, which can lead to improved financial stability and diminished reliance on cosigners. Moreover, faster graduation timelines might result in less accumulated interest over time, enhancing credit profiles and loan eligibility. For more insights on this path, consider exploring accelerated associate degrees.

What regulatory developments should cosigners monitor for potential changes?

Recent policy proposals and lender adjustments can influence cosigner obligations and overall loan terms. Cosigners need to actively monitor legislative updates affecting private lending practices, repayment standards, and borrower relief measures. Regulatory shifts may alter aspects such as cosigner release policies, collateral requirements, and even the transfer procedures between loan servicers—as illustrated by developments like a Navient transfer to MOHELA. Staying informed about these changes can help cosigners assess future risks and manage their financial commitments more effectively.

What should you consider when comparing student loan offers?

When evaluating student loan offers, focus on transparent fee structures, repayment flexibility, and lender reputations. Compare interest rates alongside any additional fees or penalties stated in the fine print. Assess whether the lender provides robust customer support and clear documentation about deferment or forbearance options. Detailed comparisons of borrowing costs and repayment scenarios can help both borrowers and cosigners make informed decisions. For further insights on alternative financial strategies, consider reviewing taking out a student loan.

How can cosigners for student loans protect themselves financially?

Cosigning a loan is a significant financial commitment that comes with risks. To protect themselves financially, I recommend that cosigners take these proactive measures:

• Understand the responsibilities. Cosigners should fully understand the obligations they are undertaking before agreeing to cosign a loan. This includes knowing that they are equally responsible for repaying the loan if the primary borrower fails to do so.
• Review the terms carefully. Before cosigning, it's crucial for cosigners to carefully review the loan terms, including the repayment schedule, interest rate, and any penalties for late payments or defaults. Understanding these terms can help cosigners anticipate potential financial liabilities and plan accordingly.
• Maintain open communication. Cosigners should maintain open communication with the primary borrower throughout the life of the loan. Regularly discussing the loan status and ensuring that payments are made on time can help prevent financial surprises and address any issues promptly.
• Monitor the loan. Cosigners should actively monitor the loan's status by keeping track of payments and checking credit reports regularly. This allows cosigners to identify any missed payments or signs of financial trouble early on and take appropriate action to mitigate risks.
• Establish repayment agreements. In some cases, cosigners may want to establish repayment agreements with the primary borrower to formalize expectations and ensure that both parties are clear about their responsibilities. This can include setting up automatic payments or creating a written agreement outlining each party's obligations.
• Prepare for the worst-case scenario. While cosigning a loan, cosigners should also prepare for the worst-case scenario where the primary borrower defaults on the loan. Having a plan in place to handle potential repayment obligations, such as setting aside emergency funds or seeking legal advice, can help cosigners protect their financial well-being in case of unexpected events.

How can choosing the most affordable online bachelor's degree lower your need for a cosigner?

Selecting cost-effective education options can significantly reduce your overall borrowing requirements. By opting for a most affordable online bachelor's degree, students often incur lower tuition and associated costs, which in turn decreases the total loan amount needed. Lower loan balances lessen the perceived financial risk by lenders, potentially eliminating the requirement for a cosigner. This strategy also supports long-term financial independence by minimizing debt and fostering a healthier credit profile without external financial guarantees.

How does pursuing professional-specific loans benefit students without cosigners?

Exploring specialized loans tailored to specific fields, such as nursing, can be a strategic move for students looking to finance their education without a cosigner. These loans often come with more favorable terms, flexible repayment options, and potentially lower interest rates compared to general private student loans.

For instance, private nursing student loans may be a viable option for students pursuing a career in healthcare. These loans are designed specifically for nursing programs, often accommodating the unique challenges and timelines nursing students face. Some lenders offer deferment periods to align with the demanding schedules of clinical training and certifications, making them a practical choice for aspiring nurses.

Additionally, the targeted nature of these loans may allow lenders to better assess risk, particularly for students entering high-demand fields with strong earning potential like nursing. This can increase the likelihood of approval without requiring a cosigner, especially for students with an established academic track record or partial funding from scholarships.

By selecting a loan aligned with their field of study, students can not only enhance their financial flexibility but also position themselves to manage repayment comfortably as they enter a high-demand job market.

How can alternative career training reduce your reliance on student loan cosigners?

Alternative career training, including targeted vocational courses and online certification programs, can offer a faster and cost-effective route to gain market-driven skills. By focusing on these education paths, individuals often bypass the lengthy and expensive process of traditional degrees, thereby reducing the need for cosigned student loans. For instance, obtaining easy certifications to get online allows you to quickly qualify for in-demand roles while minimizing upfront costs and long-term debt obligations. This strategy not only reinforces financial independence but also positions you for quicker entry into the workforce, enhancing your overall economic stability.

What are the tax implications of cosigning a student loan?

Cosigners should recognize that assuming a cosigner role does not confer any tax benefits, as eligibility for student loan interest deductions typically remains with the primary borrower. In the event of default or debt forgiveness, tax authorities may treat any cancellation of debt as taxable income, further complicating the financial landscape for cosigners. It is essential to consult a qualified tax professional to evaluate potential liabilities and ensure that all reporting requirements are met. Additionally, considering alternative education funding strategies, such as low cost online degree programs, may help mitigate the overall need for cosigning.

How can improving your credit score help secure a cosigner-free loan?

Enhancing your credit score directly impacts your ability to qualify for student loans without a cosigner. Establishing a record of timely payments, reducing outstanding balances, and regularly monitoring your credit report are essential steps toward demonstrating financial responsibility. Lenders favor applicants with stable and improving credit profiles, reducing the perceived risk and often eliminating the need for an additional guarantee. Moreover, strategic investments in your education, such as pursuing online graduate certificates, can further enhance your earning potential and creditworthiness, positioning you for better loan terms.

Key Findings 

• $167 billion in student loans were forgiven, benefiting 4.75 million borrowers. 
• 34.40% of cosigners reported negative impacts on their ability to qualify for mortgages, auto loans, or other financing. 
• About 35% of individuals who cosigned on private student loans expressed regret. 
• Funding for one academic year typically includes parent contribution (39.54%), college savings plan (11.07%), scholarships and grants (24.95%), student loans (10.64%), and student income and savings (8.05%). 
• Scholarships and grants offer a way to finance education without needing a cosigner, providing relief from financial stress and empowering students to pursue their goals freely.

Other Things You Should Know About Needing a Cosigner for a Student Loan

Can an international student get a loan without a cosigner?

International students seeking loans without a cosigner face challenges, but there are solutions. Here's a breakdown of your options:

• Specialized lenders: Explore lenders that offer loans based on your academic merit and future earning potential, bypassing the need for a cosigner.
• On-campus employment: Work-study programs and graduate assistantships can provide income and sometimes tuition remission, lessening your loan burden.
• Home country support: Consider loans and scholarships offered by your home government, banks, or private organizations. These may have less stringent requirements compared to US lenders.

If you have time before needing a loan, consider building US credit. Open a secured credit card, make timely payments on all bills, and maintain a good credit score. These steps can improve your chances of qualifying for a cosigned loan in the future.

How to get student loans if your parents won't cosign?

If parents or other potential cosigners are unwilling or unable to cosign a student loan, there are alternative options for obtaining financing for education. These may include:

• Federal student loans. Federal student loans do not require a cosigner or credit check, making them accessible to many students. By completing the Free Application for Federal Student Aid (FAFSA), students can apply for federal loans based on financial need.
• Scholarships and grants. Students can explore scholarship and grant opportunities to help cover educational expenses without the need for loans. Scholarships and grants are typically awarded based on various criteria, such as academic achievement, extracurricular involvement, or financial need.
• Work-study programs. Work-study programs offer students the opportunity to work part-time jobs to earn money to help pay for education expenses. These programs provide valuable work experience while helping students offset the cost of tuition and other fees.
• Private student loans without cosigners. Some private lenders offer student loans that do not require a cosigner. These loans may have stricter eligibility criteria and higher interest rates compared to loans with cosigners, but they provide an option for students who cannot obtain cosigned loans.

Do all loans require a cosigner?

Not all loans require a cosigner. This is especially true for federal student loans in the US, which are typically awarded without one. However, some exceptions like PLUS loans for graduate students may involve a cosigner requirement. Private lenders may also offer loans without a cosigner, particularly for students with strong academic records, scholarships, or high future earning potential.

The key for these loans is that you demonstrate creditworthiness through your own merits, allowing the lender to approve you without needing a cosigner's guarantee.

References:

1. Cato Institute. (2024). The state of student loan forgiveness: June 2024. Cato Institute. 
2. College Board (2023). Trends in college pricing and student aid 2023. College Board
3. Enterval Analytics. (2023). Private student loan semi annual report 2023. Enterval Analytics.
4. Federal Student Aid. (n.d.). Federal versus private loans. Federal Student Aid.
5. Hanson, M. (2022, June 13). How people pay for college [2023]: Financing statistics. Education Data Initiative.