Student Loan Co-Signer Responsibilities and Requirements
Getting a private or alternative student loan like NC Assist can be a smart way to pay for college or graduate school when other financial aid and savings are not enough to cover the cost of your degree. But, what’s a student to do if they don’t have credit or have a poor credit history? A responsible co-signer can help you qualify for the right student loan so you can focus on earning your diploma!
Why is a Co-Signer Necessary?
A student loan co-signer is necessary to vouch for you and promise to pay back your loan if you can’t. It’s very common for a parent or other qualified family member to act as a co-signer to help students who may not otherwise qualify for a loan get the funds they need to pay for school.
College students are new to adulting and often haven’t started building a credit history, which is basically a way to prove that you pay back debts in a timely manner. If you want to start building good credit, you can become an authorized user on a parent or other family member’s credit card, apply for your own credit card, and pay off the balance in full each month. Until you build strong credit, you may need to rely on a co-signer to help you rent an off-campus apartment, buy a car, or take out a student loan.
What are the Responsibilities of a Co-Signer?
The main responsibility of a co-signer is to pay back the loan if the student borrower is unable to do so. Other responsibilities of the co-signer for an NC Assist Loan include gathering their personal information and submitting an application. The student borrower also needs to provide the co-signer with an application ID number from the completed loan application, their last name, and the requested loan amount.
Who Should Co-Sign Your Loan?
Trust goes both ways. If you are a student who needs someone to co-sign your loan, you should ask someone you trust, but more importantly, this needs to be someone who also trusts you. After all, they are agreeing to pay off your student loan if you don’t!
A co-signer must be a qualified relative of the borrower. A qualified relative is a parent, stepparent, grandparent, sibling, spouse, or adult child of the student loan applicant. The co-signer should also have a strong credit history and a solid income.
Requirements to be a Co-Signer
There are several requirements for a student loan co-signer in addition to being a qualified relative. The co-signer must:
- Be at least 21 years of age.
- Be a United States citizen.
- Understand the student’s loan may appear on the co-signer’s credit report.
- Be creditworthy.
NC Assist Loan administrators will determine if the co-signer is creditworthy based on their application and credit score. According to Nerdwallet, most private lenders require you to have a credit score of at least 670 or higher on a 300–850 scale used by FICO.
Can a Co-Signer be Removed?
A co-signer stays on the promissory note for the life of the loan. The promissory note is the legally binding agreement between the lender and the borrower that provides the conditions under which money is borrowed and the terms under which it is repaid.
A student loan co-signer can only be removed from the loan upon their death or permanent disability or if the student borrower dies. If the co-signer dies, the student borrower remains responsible for repayment of the loan.
Benefits of a Co-Signer
In addition to enabling you to get an NC Student Assist Loan, having a student loan co-signer shows that a trusted family member is investing in your future. The NC Assist Loan can also be part of your future. After you’ve applied for other financial aid and scholarships, calculate how much money you’ll need to borrow in loans to cover the cost of college.
Apply now for an NC Student Assist Loan to bridge the gap and move forward with your education and your future career!