I wrote a book, summarizing everything on this site. It takes about an hour to read but the lessons will impact you for a lifetime. Learn how to achieve financial independence while you serve in the US military. Become an Intelligent Military Investor.
Many times to be eligible for student loans (especially private loans) a cosigner with a longer and more established credit history is required. Sallie Mae is one of the largest providers of
horrible debt slavery student loans and often requires a cosigner on their loans.
I started with over $36,000 of
Sallie Mae (rebranded as “Navient” as of October 2014) student loans in 2010 and have slowly worked it down to $29,000 in January 2013 (I’m focusing my debt avalanche on paying down my higher interest rate USAA cadet loan right now). After 24 months of on time payments to my Sallie Mae student loan, I’m ready to remove my dad as a cosigner.
Why Remove a Cosigner from a Loan
Removing a cosigner from a student loan or any loan mostly benefits the cosigner, not the person who needed the cosigner in the first place. By having their name removed from the student loan, the cosigner will probably see an increase in their credit score, due to their total amount of debt decreasing. This could make it easier for them to be approved for a mortgage, credit card, or any other product that requires a good credit score.
Ready to get your dad, mom, grandparent, or ex-girlfriend off your Sallie Mae student loans? Let’s walk through the process…
Steps to Remove a Cosigner from Sallie Mae Student Loans
1. Graduate, make 12-24 months of on time payments, and be over the age of 18
Here’s what the cosigner release fine print says on SallieMae.com:
To qualify for cosigner release, the borrower must have successfully completed school, made 12 consecutive on-time principal and interest payments for Sallie Mae’s Smart Option Student Loan® (24 consecutive on-time principal and interest payments are required for all other Sallie Mae private student loan programs), meet age of majority requirements, and meet the underwriting requirements when the request for cosigner release is processed. The borrower’s account must remain current until the request for the cosigner release is processed. The borrower must be a U.S. citizen or permanent resident at the time the cosigner release is processed.
Translated, this means you have to make 12 months of payments if you have the Smart Option Student Loan or 24 months of payments if you have any other Sallie Mae private loan. For my loans, Signature Student Loans, the requirement was 24 months. The “age of majority” line means you have to be a legal adult.
As for the underwriting requirements, what was explained to me when I called was that I had to have a solid credit history, with no 19 day or more delinquencies on my Sallie Mae loan payments.
2. Call 888-272-5543 and request a “Cosigner Release Form”
Call that number: 888-2SALLIE and fight your way through the phone tree (I found that just pressing “0” a few times connected me to an operator fast). Tell the operator that you would like to have your cosigner released from your loans. They will review your account and then email the cosigner release form to your email on file.
3. Get proof of income
Sallie Mae wants to know that you can afford to pay off your debts on your own. To do this, they require that you submit proof of income, which can be a recent pay stub or a W2 (which is handy if you’re self-employed). If you’re in the military, you can go to myPay and print your most recent LES easily.
4. Fill out and mail or fax back the “Application to Request Release of Cosigner(s)”
The release request asks for:
- Your employer information
- Annual salary
- Housing, car, student loan, and other monthly payments
- Your US citizenship status
- The cosigners you wish to release
Once you’ve filled out the basic two page document, send it back to Sallie Mae either by fax: 800-848-1949 or by mail at:
P.O. Box 9500
Wilkes-Barre, PA 18773-9500
5. Wait for 7-10 days
My total time was 18 days, but the Christmas and New Years holidays fell in there.
6. Success! Cosigner is released!
You should receive a reply from Sallie Mae which looks similar to the image below:
7. Have the cosigner check his or her credit report for free
After 60 days or so, check the cosigner’s credit report over at AnnualCreditReport.com to ensure that Sallie Mae has in fact removed the loan from their report. If they haven’t, time to follow up with Sallie Mae and see what the hold up is.
So in seven easy steps (and a bit of patience) you can return the favor to your student loan cosigner by removing them from your loans.
Have you removed your student loan cosigner? Run into any trouble having your application to release them approved?
2 Websites I Use to Achieve Financial Independence
The best way I know to achieve financial independence is to keep your investments simple, diversified, automatic, and low-cost. Costs eat into your returns like you wouldn't believe! A 1% difference in expense ratios can mean $100,000s lost to fees over a lifetime of investing.
Even if you're a DIY (do-it-yourself) investor like I am, you need to check out Betterment. You can read my full review here, but the bottom line is for only $150 per $100,000 invested (0.15% expense ratio) you get simple, diversified, and automated investing. In addition every account now gets free Tax Loss Harvesting+ features, which should increase returns for the average investor more than the minuscule management fee.
If you're not a DIY investor or are just getting started with investing, then you definitely need to check out Betterment. It's what I recommend to my family and friends who aren't strong investors or don't care to learn about asset allocations, diversification, or rebalancing.
I have investment accounts all over the place. To keep track of all of them in one place I use Personal Capital. It combines all of my accounts, shows me where I may be overpaying in fees, and provides beautiful charts showing my overall asset allocation and performance.
I use Personal Capital to track my Roth and Traditional TSP, Vanguard IRAs, banking accounts, SDP, and my Betterment taxable account, all in one place. It's free, secure and presents me with a one-stop dashboard so I can see all my money on one site.
Read my full review of Personal Capital and see how easy it can be to manage your investments in one place. Trust me, once you try it, you'll love it.
P.S. - If you have over $100,000 of assets and a 401k, you really need to run the Personal Capital 401k Fee Analyzer.