Parents are not required to cosign if your student applies for student loans. But increasing the likelihood that a parent will cosign for a private loan
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Student loans are frequently used by college students to finance their education. The first choice for students who need to borrow money is usually a federal student loan because most of them don’t require a credit check or cosigner.
However, credit will matter if your child needs to use private student loans because their federal student loans won’t be enough to cover all of their expenses. A cosigner may also be required in order to obtain a private student loan because the majority of college students have a limited credit history.
Are parents required to cosign student loans?
Most federal student loans are unrequired by credit checks or cosigners. However, to be eligible for a federal Grad PLUS Loan, a graduate student with a poor credit history may need a cosigner (also known as an endorser).
Private student loans are different. Most private lenders will take into account a borrower’s income and credit history. Your student may require a cosigner to be approved for a private student loan if they have little to no credit history and don’t make enough money to meet the lender’s requirements.
Before agreeing to cosign for your child’s student loans, you should be aware of the benefits and drawbacks.
Advantages of parents cosigning student loans
Being a cosigner for your child’s private student loans can provide them with a number of benefits if they need to fill a funding gap.
Risks for parents cosigning student loans
Without really thinking about the risks, many parents automatically agree to cosign their children’s student loans. As much as you may want to support your child financially during their college years, agreeing to cosign their loans has some drawbacks:
Student loan options without a parent cosigner
Most federal student loans don’t require a cosigner.
To qualify for federal student loans, your student must complete the Free Application for Federal Student Aid (FAFSA), where they’ll share information about your family’s personal finances.
Whether your student is an independent or dependent student affects the information they must include on the FAFSA. Except for those who are 24 years of age or who meet one of the many other requirements, such as:
On the FAFSA, independent students are only required to list their own assets and sources of income. However, dependent students are required to provide the same details for their parents, whose assets will be taken into account when determining how much financial aid the student is eligible for.
Students may qualify for one of three types of student loans depending on the information they provide on the FAFSA:
|Direct Subsidized Loans||
|Direct Unsubsidized Loans||
|Direct PLUS Loans||
How to Respond if Your Parent Plus Loan is Rejected
3 best private student loans without a cosigner
With a private student loan, students are more likely to require a cosigner, but it isn’t always the case. Without a cosigner and possibly even for students with weak credit histories or low credit scores, some private loans are available to students.
Before taking out a private student loan without a cosigner, students should take a few factors into account. Having a cosigner can help you qualify and frequently result in better interest rates. If they apply without a cosigner, their chances of getting approved or the interest rate they pay may both increase.
Students should comparison shop and take into account options from as many lenders as they can in order to find the best loan for their circumstances before applying for a private student loan without a cosigner. Credible makes this simple for students; in just two minutes, they can compare prequalified rates from our partner lenders who provide student loans without cosigners.
|Lender||Fixed Rates From (APR)||Variable Rates From (APR)||Loan amounts||Credit score|
|Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details||4.62%+10||4.72%+10||$2,001 to $400,000||Does not disclose|
|Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details||5.25%+8||4.38%+8||$1,001 up to 100% of school certified cost of attendance||670|
|Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details||4.89%+||N/A||$1,500 up to school’s certified cost of attendance less aid||670|
|Compare private student loan rates without affecting your credit score. 100% free! Compare Private Loans Now Trustpilot|
Is a parent loan or cosigning a student loan better?
Parent PLUS Loans are a type of student loan that the federal government provides and are available to parents of undergraduate students. Unlike with other federal loans, the parent is the borrower here rather than the student.
Parent PLUS Loans have some benefits, including providing the child with more financial aid for school. However, the parent is the only borrower and is accountable for paying back the loan. Your child won’t be considered responsible in the eyes of the lender even if they agree to help with loan repayment. You’ll be the only one harmed if they don’t make the payments.
Continue reading for two options for parents with bad credit seeking student loans.
Credible makes it simple to compare rates from various private student loan providers, whether you’re the borrower or the cosigner, without affecting your credit score.
See Your Rates Checking rates will not affect your credit
With more than eight years of online writing experience, freelance personal finance writer Erin Gobler She is passionate about making the financial services sector more approachable by simplifying complex financial concepts.
Choosing a Student Loan
Tools and Resources
How can I get student loans if my parents won’t cosign?
If your parents won’t co-sign for a private student loan, you can ask a close family member or a reliable friend to do so. The co-signer will typically need to have income and a good credit score in order to qualify, though eligibility requirements vary depending on the lender and the loan you want to apply for.
Are parents responsible for their child’s student loans?
Technically, parents are not required to co-sign for or sign student loans for their children because they are not needed for federal loans since there is no credit check. When it might be necessary is if there is a need to borrow money that exceeds the federal loans’ borrowing cap and necessitates private loans.
Should my parents cosign my student loan?
Parents don’t have to cosign student loans. Since most federal loans don’t require a credit check, your child most likely won’t need a cosigner for them. But because there is a borrowing cap on federal loans, your child might have to use private loans to close funding gaps.
Do federal student loans require cosigner?
For the majority of federal student loans, there is no cosigner or credit check required. Prior to leaving college or dropping below a half-time load, you have time to start repaying your federal student loans.