Can You Have More Than One Cosigner?

BIG Ideas:

• Most private lenders allow only one student loan cosigner per loan application.
• Student loan cosigners can help students qualify for lower rates and better loan terms.
• Cosigning a student loan comes with financial risks and responsibilities that can impact both the student and cosigner.

College is so much more than just the next step after high school; it’s a giant leap toward independence and the bright future many parents and students have worked toward for years.

But with the high cost of colleges today, most families can’t swing it alone. Federal aid like grants and loans can help make a dent in the cost of college, but even that is often not enough. Scholarships can help, too, but many families are still left with a gap between the cost of college and what they can afford.

That’s why private student loans were created.

Offered by non-government lenders like banks, credit unions, and non-profit organizations like Brazos, private loans help families cover the costs of college. Those costs may include tuition, housing, meal plans, books and supplies, fees, and other qualified educational expenses.

But unlike federal loans, which may be based on financial need, private loans are primarily based on creditworthiness and income, two factors that give lenders assurance that the money they lend to you will be repaid.

So, if you’re a student looking for a private loan, there’s a good chance you don’t yet have the credit history or income needed to qualify on your own. Or maybe your finances are established enough to qualify, but not strong enough for you to get the best rates and terms. That’s when student loan cosigners can help.

For many students looking for student loan cosigners, the choice seems obvious – a parent who has strong credit, steady income, and an interest in helping their child achieve their college dream.

But what if one parent’s income isn’t enough? Or what if both parents want to help?

Can You Have More Than One Cosigner On a Student Loan?

In most cases, the answer is “No” because most private lenders allow only one student loan cosigner per application.

That means students applying for private loans usually can’t have both parents cosign the loan. Instead, they’ll need to decide which parent to choose. That decision doesn’t have to be difficult or emotional; they should choose the parent with the strongest combination of income, credit, and overall financial stability.

But before parents and students make any cosigning decisions, it’s critical to understand a few things about cosigning. Let’s unpack them.

What a Student Loan Cosigner Is

A student loan cosigner is a person who agrees to take legal and financial responsibility for repaying the loan if the student is unable to make payments for any reason. So, if the student becomes ill or unemployed and can’t make the payments, the cosigner will have to pay.

It’s also critical that the student make payments on time every time, since late or missed payments can impact the credit of the student and the cosigner.

How Student Loan Cosigners Can Help

Again, if you’re a student, you may not have a steady job or established credit. Those two factors give private lenders confidence that you have the means and borrowing history to repay the loan. If, however, you have a cosigner like a parent who has strong credit and a steady income, you may qualify for lower rates, more favorable borrowing terms, and higher borrowing limits.

Student Loan Cosigners Don’t Have to Be Parents

For many students, the most obvious choice is a parent. But parents aren’t the only option. Students can also choose a responsible adult, including:

• A relative, like a grandparent
• A spouse if the student is married
• Family friend
• Another trusted adult

Because of the financial responsibilities involved, students should understand that asking someone to be a cosigner is a huge deal. They should be very selective about whom they choose and look for a student loan cosigner who has:

• Trust that the student is responsible and will repay the loan
• A steady income
• Good-to-exceptional credit
• Few debt obligations
• A strong credit score and a history of paying bills on time

How Student Loan Cosigners Are Impacted

If a parent or other adult cosigns a student loan, they’re not just taking on additional risk; they also may reduce their borrowing capacity because the student loan could count toward their debt obligations. So, if they want to get a mortgage, home equity line or loan, or a car payment, for example, their ability to qualify for the loan or borrow more could be impacted.

Factors to Consider Before Cosigning a Loan

By now, it’s clear that asking someone to be a student loan cosigner, or agreeing to become one, is a big deal. So, if you agree to cosign a loan, you must understand the responsibilities and risks involved and how they could impact you financially. This includes answering the following questions:

• Is the student fiscally responsible?
• Can you afford to take on the responsibilities if the student defaults on the loan?
• Can you take on more debt?
• Do you plan on applying for loans in the future?
• Do you have a strong credit history?
• Can you take on the long-term commitment, since private student loans may have long repayment periods?
• How could it impact your relationship with the student if you do agree to be a student loan cosigner?

When Student Loan Cosigners May Be Released

Depending on the lender, student loan cosigners may have the opportunity to be released from the loan after the student meets certain criteria, which may include:

• Having a history of making on-time payments
• Maintaining solid credit
• Having sufficient income

Programs and features vary significantly from lender to lender, so be sure to understand the lender’s policies before you cosign.

Think Carefully Before You Proceed

Whether you’re the student asking or the parent, friend, or guardian agreeing to cosign a private student loan, it’s critical to understand all the responsibilities involved and have honest, thoughtful conversations. Remember, the goal is not just about getting the loan. It’s ensuring that everyone involved feels confident about the commitment they’re taking on.  

Brazos Can Help You Make Your College Plans Possible

For more than 40 years, Brazos Higher Education has helped students and parents finance the cost of college. As a Texas nonprofit, we offer competitive rates on private student loans that can help you fill the gap where federal aid, scholarships, and your savings leave off. Contact us today.