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Private Student Loan Co-Signers: Release, Default, and Responsibility

Co-signing a private student loan means taking on a real repayment obligation, even when someone else receives the education. A future release may have conditions that are harder to meet than expected. Read those requirements before signing and make a plan for seeing payment information, because problems can affect the borrower and co-signer at the same time.

The questions below use selected Consumer Financial Protection Bureau guidance, adapted and organized by Fynoptic. Source links and the dates displayed by those sources are provided at the end.

What is a co-signer for a student loan?

A co-signer is a person who agrees to repay a loan along with the primary borrower. There are several obligations and risks to consider before co-signing for a loan.

Things to consider as the primary borrower:

In order to qualify for a private student loan, you may be required to have a co-signer. You may also choose to have a co-signer to borrow at a lower interest rate due to the co-signer’s good credit record. Before you ask someone to co-sign a loan, consider the obligations and risks:

  • As with undertaking any legal obligation, be sure to read the loan documents carefully.
  • The student borrower is required to make all payments on time, as outlined in the terms of the loan. Any late or missed payments for a co-signed loan will affect both the co-signer and the student’s credit history.

Things to consider as a co-signer:

  • As with undertaking any legal obligation, be sure to read the loan documents carefully.
  • Co-signers are equally responsible for and legally obligated to repay the loan. As a co-signer, consider whether you are willing and able to repay the loan if the student borrower does not repay the loan on time.
  • Any late or missed payments for a co-signed loan will affect both the co-signer and the student’s credit history. Before co-signing a loan, consider whether you are willing to risk harm to your credit record if the student borrower does not repay the loan.
  • If the loan goes into default, private lenders often hire collection agencies to get a co-signer to repay. As the co-signer, you could also be sued by a debt collector or lender.

Learn more about how to prepare to become a co-signer.

If I co-signed for a private student loan, can I be released from the loan?

In some instances, a co-signer may be released from a private student loan.

You should always carefully review the terms and condition before co-signing a private student loan.

If you have co-signed a private student loan, some loans do have options to release the co-signer. The lender or servicer may have specific criteria, which you can find in the loan’s terms and conditions and on the lender’s or servicer’s website.

Learn how to find your private loan lender or servicer

If I co-signed for a student loan and it has gone into default, what happens?

The student is the primary borrower with the responsibility to pay back the loan, but as a co-signer you have equal responsibility for repaying the loan if the student doesn’t. If the primary borrower defaults on the loan, it could impact your credit.

Any late or missed payments are reflected on both your credit report and the student’s. If the student defaults on the loan, private lenders will often hire collection agencies to get you to repay, and they may also sue you in court. Lenders can also report your default to consumer reporting agencies, which could harm your credit.

Remember that you have rights when dealing with debt collectors, and it is against the law for a collector to harass you or make false statements to you.

See your options for dealing with default on a co-signed student loan.

What happens if I default on a private student loan?

If you’re unable to make your private student loan payments, the lender can report your default to consumer reporting agencies, which could harm your credit. They may take different actions to collect the debt.

Tip

If you are worried you won’t be able to pay your private student loan, contact your lender or servicer as soon as possible. You may be able to negotiate with your lender to set up a new repayment plan or otherwise settle your debt.

Private student loans often go into default when you miss monthly payments. Depending on the terms of your loan, you can also default on a private student loan if you declare bankruptcy or default on another loan.

Private lenders may attempt to collect on your debt directly, or they may hire collection agencies to try to collect on your debt. In addition, they may take you to court within the statute of limitations. A statute of limitations legally sets the maximum amount of time when a lawsuit can be filed upon default of your student loan. The statute of limitations for private student loans varies from state to state.

After the statute of limitations has expired, the private lender is no longer legally allowed to sue you to collect the debt.

You should review your private loan contracts carefully to better understand what rights you have if you are worried about going into default. If you have not received a letter from your servicer and you believe you may be in default, you should consider contacting your servicer immediately to discuss repayment options and determine if it is possible for you to avoid default.

If I co-sign for my grandchild's student loan, can the lender garnish my Social Security check if they don't repay the loan?

Private student loan companies are not allowed to garnish your Social Security check. But a lender could take you to court for loans you have co-signed if the primary borrower doesn’t pay them.

Companies that offer private student loans are not allowed to garnish Social Security checks of co-signers if the borrower doesn’t repay the loan. But the lender can still pursue you and even take you to court to try to collect the amount due on the loan. Keep in mind that private loans do not carry the same consumer protections as federal student loans.

Only federal student loans can result in garnishment, or offset, of Social Security benefits. However, most federal student loans do not require a co-signer. A biological or adoptive parent (or in some cases, a stepparent) can borrow a certain type of federal student loan called a Direct PLUS loan to help a child pay for college. Grandparents must formally adopt grandchildren to be eligible to apply for Direct PLUS loans.

Encourage your grandchild to explore all federal student aid options before taking out a private loan.

Sources and further reading

The CFPB source passages are U.S. government work in the public domain. Fynoptic has selected, organized, and adapted the material for this guide, including corrections identified through the additional sources listed above. Sources accessed October 27, 2026. This use does not imply agency endorsement or affiliation.

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