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How to Get a Student Loan Without a Cosigner

For most people heading to college, student loans are a requirement. They help you pay tens of thousands of dollars in tuition, fees and even housing. So how can you get a lown without a cosigner?
Author: Jack Wickens
Jack Wickens

Writer, Contributor

Experience

Jack is a personal finance writer who has been writing for more than a decade. His passion for educating consumers and helping everyday families earn more and live better. He is most knowledgeable with years of experience covering topics such as savings, budgeting, and responsible credit use and always happy to share his expertise with readers.

Review & Fact Check: Baruch Mann (Silvermann)

Jack Wickens

Writer, Contributor

Experience

Jack is a personal finance writer who has been writing for more than a decade. His passion for educating consumers and helping everyday families earn more and live better. He is most knowledgeable with years of experience covering topics such as savings, budgeting, and responsible credit use and always happy to share his expertise with readers.
Author: Jack Wickens
Jack Wickens

Writer, Contributor

Experience

Jack is a personal finance writer who has been writing for more than a decade. His passion for educating consumers and helping everyday families earn more and live better. He is most knowledgeable with years of experience covering topics such as savings, budgeting, and responsible credit use and always happy to share his expertise with readers.

Review & Fact Check: Baruch Mann (Silvermann)

Baruch Mann (Silvermann)

Financial Expert, The Smart Investor CEO

Experience

Baruch Mann (Silvermann) is a financial expert and founder of The Smart Investor. Above all, he is passionate about teaching people how to manage their money and helping millions on their journey to a better financial future.

You can trust the integrity of our unbiased, independent editorial staff. We may, however, receive compensation from the issuers of some products mentioned in this article. See how we make money.

Table Of Content

With the rising cost of education student loans have increasingly become important. In this chart compiled with Federal Student Aid data, you can see that 8.3 million borrowers have a student loan balance of less than $5,000. The most common balance is $20,000 to $40,000 with 9.5 million borrowers. At the other end of the scale, 800,000 borrowers have student loan debt of over $200,000.

Student Loan Balance Number of Borrowers (Millions)

If you’re trying to pay for school, you get a number of different options. Federal loans, private loans, grants and even scholarships are all available. When it comes to scholarships, federal loans and grants you usually don’t need a co-signer, but those who go for private loans may need that help.

What is a Co-Signer?

When it comes to a co-signer, it means you have someone who will vouch for you. This is someone who signs for the loan with the lender and you.

That means, if something happens and you are unable to pay your loan, the co-signer will be responsible.

If you make a payment late it means that your co-signer is going to be affected in the same way that you are. That’s definitely not something that either of you wants to happen.

Now, getting a co-signer won’t work for just everyone. Sometimes the adult that you want as your co-signer isn’t able to get approved. They might not be interested in taking on that risk either. If they do take the risk it means they’re responsible for anything you don’t pay.

It also means that they may not be able to get a loan that they want or need because they’re tied up with yours. Increasing their debt-to-income ratio could mean that they can’t get a new credit card or a car loan, or something else.

Who Can Be a Cosigner on a Student Loan?

A co-signer can be a spouse, relative, parent, or any adult who is a United States citizen or Permanent Resident Alien with a good credit history.

A cosigner assumes the same level of responsibility for the student loan repayment as the principal borrower, and is equally affected by missed payments. As a result, a solid, favorable relationship between the borrower and the cosigner is critical.

If you can't pay back your loan, your cosigner agrees to make payments on your behalf, so be sure you and your cosigner are on the same page.

Pros & Cons of Student Loan Without a Cosigner

You can apply for federal loans without a cosigner, but if your federal loan limitations have been reached or you need to take out private loans to cover any remaining educational costs, adding a cosigner is frequently the best option.

The main advantage of getting a cosigner is that you're more likely to get your loan authorized and/or get a better interest rate. This is especially true for those who have a restricted or bad credit history.

Getting a lower interest rate can save you money in the long run because you won't have to spend as much in monthly loan payments. The monthly payment and total repayment costs of private student loans are determined by the repayment plan chosen by the borrower.

While you can still apply for private student loans without a cosigner, keep in mind that you'll need a strong credit history and a high credit score (often 650 or higher) to be considered.

Getting a Federal Loan Without a Co-Signer

The lucky thing is that you won’t need a credit history or a co-signer in order to get approved for a U.S. government loan.

1. Direct Subsidized Federal Loans

These loans are one of the most common, and for good reason. You can qualify for one pretty much anytime you need it. You just have to be an American citizen and not have any outstanding federal debts. As of 2021, the interest rates are fixed and they’re only 3.73%.

When it’s a subsidized loan that means that you don’t have to pay interest while you’re still attending school. Instead, the interest is paid for by the government.

With an unsubsidized loan, however, you’re responsible for interest while you’re in school. You don’t have to pay it then, but you’ll owe it when you get out of school.

With either of these types of loans you’re going to have repayment options when you do finish school and your deferment period is over. These could be standard, graduated or income-based plans.

Students typically have a number of options to finance their education. In this chart using NSDLS data, we can see that Stafford Combined has 33.2 million student loan borrowers. This is followed by Stafford Subsidized and Stafford Unsubsidized with 29.5 million and 28.9 million respectively. At the other end of the scale, Grad Plus has 1.4 million borrowers and Perkins with 2 million student loan borrowers.

Student Loan Borrowers (millions) by Loan Type

2. Direct Unsubsidized Federal Loans

The other option is an unsubsidized loan, which is offered also to graduate and professional students. If you have financial need you can get subsidized, but this loan doesn’t care about finances. Just about everyone enrolled half-time can get an unsubsidized loan.

You will be responsible for paying interest on this type of loan and the amount is fixed at 3.73%. Payments are deferred until you graduate, which is more convenient, but you’ll still have to pay for it at that time.

An unsubsidized loan of this type can be $5,500 to $12,500 per year, but it depends on whether you’re dependent or independent. If you’re considered financially independent you may qualify for higher amounts. This is also true if you are dependent but your family would not qualify for a Parent PLUS loan.

3. PLUS Loan

These loans are actually for the parents of students, rather than the student themselves. The student must be enrolled at least half-time and must be in an eligible school. This could be for undergraduate, graduate or professional study. The parents pay higher interest, 7.6% as of 2018, but this allows the parent to contribute toward the education of their child as well.

Now, if you’re comparing a PLUS loan to a private loan you’ll likely get a better rate here. They also don’t care about creditworthiness or a guarantor. They’ll provide these loans to anyone that has avoided specific credit problems.

Getting money is actually quite easy through the Department of Education. But if you need more money than the maximum allowed you’ll find yourself in a little more trouble. There’s only so much available per student for each term. That means you may have to get loans from a private lender if you don’t have enough.

Applying For Federal Loans

Here are the basic steps you should take when applying for federal loans:

Fill Out the FAFSA

The very first thing you need to do is fill out the Free Application for Federal Student Aid.

This form, also known as FAFSA, is a requirement for any kind of federal help. Whether it’s a student loan, a work-study program or a grant, you have to fill out this form. Some schools and states require it for their aid packages and scholarships as well.

The FAFSA4caster tool actually helps you get an idea of what the FAFSA form outcome will be, so you can prepare for your financial outlook. That way, you’ll know what kind of gap you might have in your funding and you can make a plan for how to get the money you’re going to need.

Keep in mind that the FAFSA is entirely free to fill out and that you do not need someone else to fill it out or submit it. That means you don’t have to pay for these things. If you do need help, use a free guide from the government or seek out a free program with your college or university of choice.

The submission period for your FAFSA is October 1st of the year before the term that you’re going to start. You can submit it late, however, by June 30th up to 2 years after you start the term in question.

Ask Your Parents

There are a number of ways that you can be considered a dependent student. If your parent claims you for tax purposes you’re a dependent. This is true even if you don’t live with your parents. In some cases, even if you are not claimed as a dependent you could be considered a dependent.

Just because your parents help you to fill out your forms doesn’t mean that you will require a co-signer in order to get a loan.

What it means is that you’re going to have to put your parents income and information directly onto the forms and that will impact what you actually qualify for in regards to aid.

Make sure you pay attention to what it takes to be considered an independent student. Your financial aid office of the school you will be attending can help you with your forms and what you’re allowed to do.

You’ll receive a Student Aid Report after you complete and submit your FAFSA form. This report will let you know what information about you was submitted and you’ll have to review it to make sure that everything is done right. If there are any problems you’ll need to change them now.

After you get your SAR you’ll get an award letter that lays out all of the aid that you’re able to get. This form will be slightly different depending on which school you plan to go to.

Keep in mind that any loans that you qualify for under your own name are not held jointly by your parents. This means that they are not obligated to pay these loans if you do not. Even if you use their information on the forms – they will not be responsible. The only exception is if they take out a Parent PLUS Loan.

Can You Be Denied a Federal Student Loan?

Yes, you may be denied a federal student loan for a variety of reasons, including:

  • You have not made satisfactory academic progress in school.
  • You defaulted on your existing federal student loan.
  • Refunds of any previous federal grants you owe.
  • The academic program you are enrolled in makes you ineligible for funding.
  • Your eligible non-citizen status has been revoked or expired.
  • You are imprisoned.
  • You plead guilty to a crime involving federal student aid fraud.

Getting Private Loans Without a Cosigner

When it comes to private loans there is no government backing. You get these through private lenders. There are some things that are important to know about any and all private loans. The other specifics are going to be different depending on the different lenders you work with. Look at each of these things before you apply:

You’ll need to fit each of these in order to get the loan you’re looking for without having to get a co-signer.

  • Good Credit – Your credit score is definitely going to be checked here. The lender you choose will look at your score and your reports. A higher score will give you lower rates and that means you may not need a co-signer.
  • Good Income – If you have a good amount of money coming in personally you might not need a co-signer. If you make at least $25,000 per year you’ll be set, so make sure you’re getting a job for yourself.
  • Balanced DTI – Your debt-to-income ratio needs to be low enough that you can reasonably pay back the loan on your own.
  • Citizenship – You must prove your citizenship or prove that you are a permanent resident.

Improve your credit score before you ever apply for a private loan. This will help you get the approval that you’re looking for without needing a co-signer. If you don’t have a great credit score you’ll have to either get a co-signer or accept a higher rate in order to balance out the risk.

Now, if you do need to get a co-signer on your loan you don’t have to keep them there forever. Once you have the opportunity to refinance you’ll be able to remove your co-signer. If you have a federal loan with a co-signer you can refinance to a private loan and remove the co-signer as well. This type of refinancing means that you will have a new loan. You may get better terms for this. Just look at a refinancing calculator to find out what’s going to improve with refinancing.

Now, make sure that you include a co-signer release into your loan if at all possible. This will allow you to meet certain rules and then remove the co-signer completely. That way, your co-signer will not be obligated to make payments on your loan if anything should happen.

Sometimes this means making payments for 2 years on-time but it could be different depending on the specific company you work with. If you’re looking to get a loan without a co-signer at all you’ll want to start with the factors above, but if you do have a co-signer make sure you look into a release option.

What To Do If I Can't Pay For Tuition in Full?

You may not be able to postpone your education. If you're having trouble getting a student loan without a cosigner, here are a couple choices to help you get started on your education while building credit:

  • Work-study programs and other options are available through your school's financial assistance office. These programs allow students to earn money that can be used to pay for their education.
  • Get a full-time work and enroll in one or two evening classes. You can gain credits and earn more money, which can help you qualify for private student loans without a cosigner.
  • Consider enrolling in a less expensive school. Tuition and room and board costs could be reduced by enrolling at a community college or staying closer to home.
  • Examine every scholarship option available to you. This includes scholarships based on your personal hobbies, talents, ancestry, and even field of study, in addition to academic awards.
  • Look for a part-time or full-time employment with a company that reimburses tuition. You can earn money and credits, as well as money that you won't have to repay in the form of tuition.

You could be tempted to take a gap year if you've already started your studies and have student debts, but don't forget that delaying your education could make it more difficult to return.

Get a Student Loan Without a Co-signer - FAQs

If you do not have a co-signer, you should seek federal loans before considering using private lenders, as they generally provide borrowers with better terms and more protection. Federal loans do not require a client because they are not based on income or credit. Improving your credit score may also affect your approval.

When you find a lender who can provide you with a loan without a co-signer, shop around to get the best terms possible. The lender usually allows you to pre-qualify and view your interest rate by entering basic information on their website.

Whether you are a dependent or independent student needing the financial information of your parents in your paperwork, the good news is that you can easily obtain a federal student loan without the obligation of the signatory.

Unfortunately, private student loans without the support of a guarantor are more difficult to obtain, especially for undergraduates with poor credit history. When you are deciding how to apply for student loans, federal loans should usually be the first choice because their repayment plans provide greater flexibility.

An income-sharing agreement (ISA) is a contractual agreement between a student and his school. Students agree to accept money borrowed from the university to fund their education. In exchange, they agreed to pay a certain percentage of salary to the university after graduation (in the next few years).

The amount you repay (think of the minimum repayment amount) will increase as your income increases. So basically, as you progress in the professional field and start to increase your salary, the income sharing agreement will come into effect and take up more and more of your income.

Generally, private lenders may have the highest interest rates, as federal student loans typically have preferential rates. However, the actual rates will depend on your circumstances. If you have perfect credit, you will find that any lender offers you a lower interest rate compared to someone with poor credit.

Just like personal loans and mortgages, the interest rates for student loans can vary a great deal. The current rates for private student loans can reach 14.99% APR or more. Generally speaking, anything above 10% is considered a high rate for student loans, while rates below 7% are considered to be more average.

If you work full-time in public service and complete the requirements for the Public Service Loan Forgiveness Program, you may be eligible to have your student loans forgiven. After ten years of full-time employment in the public sector, this program will cancel any residual debt. You must have paid on a Federal Direct Loan for at least 120 months to be eligible.
To guarantee that your qualifying service is properly recorded, you must fill out employment certification paperwork and follow the Department of Education's guidelines.

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