Cosigned a Private Student Loan? The Exit Is 12 On-Time Payments. One Hardship Forbearance Pushes It Back a Year.

If you cosigned your kid’s private student loan, you share the legal responsibility for repaying it until it’s paid off or you’re formally released. Release exists. But you can’t apply for it, and one hardship forbearance on the borrower’s side shuts the door for a year.

Here’s how the clock works, and how to keep it from resetting.

Almost every new Sallie Mae loan has a cosigner

Sallie Mae reported its third quarter on October 22. Its cosigner rate on new loans was 92%. Its graduate loan originations grew 119% in what it calls the first academic year “following PLUS reform.”

The same report shows some strain. Delinquencies rose to 4.2% of loans in repayment, from 4.0% a year earlier. The share of loans in forbearance, where payments are paused, rose to 2.3% from 2.0%.

Forbearance is the part a cosigner needs to watch.

The fine print on getting off the loan

Sallie Mae’s rules for releasing a cosigner are all on one page, and they’re strict. Only the borrower can apply. The borrower has to:

Graduate, or finish the certificate program.

Make 12 on-time principal and interest payments on each loan, or pay ahead by that much. Interest-only payments don’t fit that wording.

Go 12 months with no payment 30 or more days late, and no hardship forbearance or modified repayment program.

Pass a credit review. That means no bankruptcy, foreclosure, defaulted student loan or 90-day delinquency in the last 24 months, plus enough income to carry the loan alone.

Here’s the catch. A borrower who hits a rough patch in month 10 and takes a forbearance hasn’t just paused. Under those rules, they can’t qualify until 12 months after it. Your exit just moved back about a year.

This isn’t new. In 2015 the CFPB found that 90% of borrowers who applied for cosigner release were rejected, and that some lenders permanently disqualified anyone who had used forbearance.

What it costs you to stay on

As long as your name is on the loan, Sallie Mae says you and the borrower “share the legal responsibility” for repaying it. If the borrower pays late, Sallie Mae’s own page warns that late payments “may be reported to consumer reporting agencies,” and that can hit your credit.

The quiet risk runs both ways. In 2014, the CFPB found some private loans went into automatic default when a cosigner died or filed for bankruptcy, even with every payment current.

Do this now

Put the date on the calendar. Count 12 on-time principal and interest payments. If the borrower has graduated by then, that’s the earliest they can apply. Turn on autopay so a forgotten due date doesn’t cost you a payment toward the 12.

Talk before anyone signs up for forbearance. If money gets tight, call the lender together and ask what it does to the release clock before you sign up for anything. Sometimes a short pause is still the right move. Just know the price.

Have the borrower apply the month they qualify. Nothing happens automatically, and you can’t file it yourself. Get the decision in writing.

If release is denied, refinance. A borrower with steady income can refinance into a new loan in their own name, which pays off the cosigned one. Our breakdown of fixed versus variable student loan refinance rates shows what to compare, and the student loan guide covers the basics. Run the new payment through the loan calculator first.

Cosigning got the loan approved. Getting off it takes a plan.

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