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How to Get Your Parent Off the Hook for Your Student Loans
Refinancing and co-signer release can get a parent's name off of student loans.
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Updated · 2 min read
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NerdWallet's content is fact-checked for accuracy, timeliness and relevance. It undergoes a thorough review process involving writers and editors to ensure the information is as clear and complete as possible.
Ryan Lane is an editor on NerdWallet’s small-business team. He joined NerdWallet in 2019 as a student loans writer, serving as an authority on that topic after spending more than a decade at student loan guarantor American Student Assistance. In that role, Ryan co-authored the Student Loan Ranger blog in partnership with U.S. News & World Report, as well as wrote and edited content about education financing and financial literacy for multiple online properties, e-courses and more. Ryan also previously oversaw the production of life science journals as a managing editor for publisher Cell Press. Ryan is located in Rochester, New York.
Des Toups was a lead assigning editor who supported the student loans and auto loans teams. He had decades of experience in personal finance journalism, exploring everything from car insurance to bankruptcy to couponing to side hustles.
Lead Assigning Editor
According to the most recent data from the Department of Education, 3.7 million parents nationwide have Parent PLUS loans, which can be borrowed on behalf of their children.
If a parent took out a loan for your education — or helped you get a loan by co-signing — there’s a way let them off the hook for it.
You can do this by refinancing the loans in your name or applying for co-signer release, depending on which type of loan your parent has. Here’s how both options work.
Refinance in your name
If your parent has federal loans, the only way to transfer parent PLUS loans is to refinance with a private lender. This will replace your parent’s loan with a new private loan in your name.
Refinancing student loans can save you money by lowering your interest rate and shortening your loan term. For example, refinancing $130,000 from 7% to 5% would reduce your monthly payments by $131 and save you $15,667 in interest, assuming a 10-year repayment plan.
But there are drawbacks to refinancing PLUS loans, like losing access to benefits such as income-driven repayment plans and loan forgiveness programs. Private student loans don’t offer these.
Eligibility for repayment and forgiveness options depends on the borrower — and for PLUS loans, that’s the parent. If your parent does not qualify for Public Service Loan Forgiveness or income-driven repayment, it may be worth forfeiting those benefits.
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If your parent co-signed a private student loan, you can refinance it to remove their name.
But if you can’t qualify for a refinance — or if the new loan will be more expensive — most private lenders will release your co-signer without changing your loan’s terms.
The requirements for co-signer release vary by lender. You’ll typically need to meet the original underwriting criteria of the loan, which means you’ll likely need to demonstrate steady income and pass a credit check.
Lenders also usually require you to make a set number of payments before applying.
For example, Sallie Mae requires you to make at least 12, on-time full payments — that's principal and interest. You'll also need to avoid any type of deferment or forbearance for at least a year before applying for cosigner release.
Be sure to keep up with your lender's requirements to make sure you qualify for their cosigner release program.
Refinance, then release
Depending on your financial situation, it can be challenging to qualify for a refinance. You’ll typically need a credit score in at least the high 600s and a debt-to-income ratio below 50% to refinance.
If you don’t meet those criteria and your current lender does not offer cosigner release, consider refinancing with a co-signer to a lender that has a cosigner release program. Just make sure to understand the details of the lender’s co-signer release program if that remains your eventual goal. You could also eventually refinance again on your own as your situation improves.