How to Qualify for a Navient Cosigner Release (Plus a Shortcut)

Being a cosigner on a student loan can be a huge burden.

If the primary borrower falls behind on the loan, cosigners must step in and cover those payments. Furthermore, even if the primary borrower is managing the loan well, cosigners may find it more difficult to qualify for lines of credit or loans.

Fortunately, many cosigners can remove themselves from the student loan through a cosigner release. Securing a cosigner release isn’t always easy, but between the traditional route and a popular shortcut, many borrowers can secure a Navient Cosigner Release.

The Navient Cosigner Release Requirements

The basic requirements for a release on a Navient student loan are fairly straightforward.

The primary borrower on the loan must do the following:

• Make Payments: The borrower must make 12 consecutive, on-time payments of both principal and interest while on a standard repayment plan.
• Provide Proof of Completion: They must submit proof of graduation or successful completion of course of study.
• Provide Proof of Income: They must submit proof of income.
• Verify Status and Age: The borrower needs to be a U.S. citizen or permanent resident and reach the age of majority (18 in most states).
• Apply for Release: They must submit an official application for a Cosigner Release.
• Pass a Credit Check: The borrower must demonstrate their ability to pay the loan independently by passing a credit review.

It’s worth noting that the cosigner does not need to take any actions during this process. It’s entirely up to the primary borrower to fulfill these requirements. Typically, the challenge for most borrowers is making a year’s worth of payments and successfully passing the credit check.

If these requirements pose a significant challenge, borrowers might consider refinancing the loan. This refinancing shortcut can bypass the need for a cosigner release by replacing the existing loan with a new loan under different terms, effectively removing the original cosigner from any obligation.

The Navient Application

The full Navient cosigner release application is available here.

As part of the application process, Navient requires borrowers to provide proof of income. According to Navient, the following forms of proof are acceptable:

• current year W-2 or 1099-MISC,
• copy of a paystub issued within the last 60 days,
• SSI/disability award letters issued within the current calendar year,
• current year statement of retirement income or annuities, or
• most recent Federal tax return.

Navient may request additional information at their discretion. Thus, it’s important to be prepared to supply further documentation if needed.

While the application process might be tedious, it is generally straightforward. However, the credit check remains the biggest obstacle for most borrowers, even those those with high incomes and good credit scores. It’s this step that often determines whether Navient will grant the cosigner release, as it assesses the borrower’s financial stability and ability to manage the loan independently.

The Cosigner Release Timeline

According to Navient, when applying for a cosigner release, it typically takes about 30 days to process the application. However, if Navient requires additional documentation to support the application, this timeframe can extend.

Upon approval, it can take up to an additional 30 days before the cosigner’s credit report reflects this change. This is because Navient reports updates to the credit bureaus at the end of each month. Consequently, if Navient grants the cosigner release just after they update the credit bureaus, the cosigner will probably have to wait the full 30 days for the credit report to reflect the release.

However, if necessary, Navient can provide a letter documenting the release of the cosigner. The cosigner can use this letter to prove that they are no longer legally responsible for the debt. This can be helpful for immediate financial transactions or negotiations that require evidence of reduced debt obligations.

Passing the Credit Check and the Problem with Traditional Cosigner Releases

All borrowers applying for a cosigner release must undergo a credit check. This credit check includes a hard-pull of the primary borrower’s credit report. (A hard-pull, or hard inquiry, means that the credit check will count as a credit inquiry and can potentially hurt the applicant’s credit score.)

Navient does not publicly disclose the specific minimum credit score or income required to pass this credit check. This lack of transparency can make it difficult for borrowers to gauge their chances of success.

The challenge with cosigner release requests is that lenders like Navient have almost no incentive to approve them. Cosigners provide the lender with an additional layer of security. This is because two parties are legally bound to repay the debt. Releasing a cosigner leaves only the primary borrower responsible, reducing the lender’s security without any benefit to them.

Unlike new credit applications, where approving creditworthy individuals generates business, the cosigner release process involves no new loan issuance but merely adjusts the terms of an existing one. Hence, lenders gain little by approving these releases.

Perhaps unsurprisingly, cosigner release rejections have led to significant criticism. Furthermore, they have been the source of complaints to the Consumer Financial Protection Bureau (CFPB). One CFPB report found that cosigner release policies in the industry were “often opaque” and “created substantial roadblocks for borrowers.” The same report found a 90% rejection rate, though specific data for individual lenders was not provided.

Given these obstacles, many borrowers turn to refinancing their student loans as an alternative method to achieve a cosigner release.

A Shortcut to a Cosigner Release

When a borrower refinances their student loans, the refinancing company pays off the existing loans and replaces them with a new loan, usually with different terms.

Student loan refinancing traditionally appealed to borrowers because the terms of the new loan can include lower interest rates and lower monthly payments. However, with the challenges borrowers face in obtaining cosigner releases, borrowers have begun using refinancing as an alternate strategy for removing cosigners from the loans. Refinancing eliminates the need for a cosigner release by simply paying off the original loan, thereby releasing the cosigner from any further obligation associated with that debt.

Readers of this site have reported the most success using SoFi or Splash Financial to get approved without a cosigner. However, there are about 20 different national lenders that provide refinance services.

The Problem with Refinancing and Making a Decision

A new loan with new repayment terms is typically the advantage of refinancing. However, these new terms can potentially be a disadvantage.

Borrowers who have Navient loans with low interest rates may find that the refinance shortcut is not the best route.

If you’re uncertain about whether to refinance or pursue a cosigner release through Navient, it could be wise to explore both options simultaneously. Start by applying for the cosigner release with Navient to see if you can maintain your favorable rate without your cosigner. Meanwhile, initiate the refinancing process to compare the terms you might receive from different lenders.

At present, the best interest rate currently offered by refinance lenders is about 2%. Those who have interest rates with Navient below 2% may find that jumping through hoops to get the cosigner release is the best approach.