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What Happens to My Cosigner if I Stop Paying My Student Loans

Written by Steve Rhode

“Dear Steve,

Over $200,000 in private student loan debt with a cosigner.

If I choose to stop paying my private student loans, will I be held responsible or will the companies go after my cosigner?


Dear Lulu,

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Nothing good is going to result. The lender will most likely pursue you and/or the cosigner for payment. The defaulted payment history will be reflected on your cosigner’s credit report.

A cosigner is 100 percent liable for the debt if you don’t or won’t pay. If these are private loans then you could ask your lender how the cosigner can be released from the loans so your future failure to pay won’t drag them into court if the lender decides to sue. See Letters to Release Co-Signer From Private Student Loan.

The reason the lender asked for a cosigner was because they didn’t think you were a good credit risk so they wanted somebody with better credit to go after if you did not pay.

Cosigners are well intentioned but open themselves up to a whole world of unnecessary liability and risk. My rule to anyone thinking about cosigning is don’t do it.

But if you think you might default, before you do, it would be a good idea to discuss the situation with the cosigner and make the case it might make better sense for them to help you out with the payment right now than face the potential collection and legal efforts of the creditor. At least that way the cosigner would not take the hit to their credit report and credit score.

Please post your responses and follow-up messages to me on this in the comments section below.

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About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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