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Many private and state-sponsored student loans may require a cosigner who pledges to pay back the loan if the borrower does not.

Cosigning a loan is an action that should never be taken lightly because it can have serious implications to credit history. The loan appears on the cosigner’s credit report and can directly affect his or her credit as a debt owed.

Ideally, the borrower of a cosigned loan is reliable, never late and never misses a payment. The cosigner’s willingness to risk his or her credit helps the borrower get the loan and can help the borrower build a positive credit history. If the borrower does not make payments, the cosigner is responsible for repaying the debt. The unpaid debt will appear on both the borrower’s and cosigner’s credit reports, and if payments are late, could harm their credit and perhaps their ability to qualify for new credit. If left unpaid, it could also lead to collection accounts and harm creditworthiness.

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Cosigning BND Student Loans

BND Student Loans, offered through the state of North Dakota, provide funding for postsecondary education. The loans are based on credit, which means if a borrower does not meet BND’s credit criteria, they need to apply with a creditworthy cosigner. Borrowers can choose to apply with or without a cosigner initially, but if they do not meet BND’s credit criteria, they can re-apply with a cosigner.

The application process

There are application steps the borrower, cosigner (if applicable) and school need to complete. Click a link below to learn about the application process for a specific BND loan program below.

Repaying a BND Student Loan

While the borrower or cosigner may choose to make payments of any value at any time while the borrower is in school, regular monthly payments are not required until the loan enters repayment. Repayment begins six months after the student graduates, leaves college or starts attending less than half-time.

Cosigning a DEAL One Loan application to refinance student loan(s)

Refinancing student loans may be a good option for some borrowers. By refinancing with a lower interest rate, some borrowers may be able to decrease the amount of their monthly payments. Other borrowers may choose to pay the same amount every month and repay the loan more quickly. BND has a program for North Dakota residents to refinance all of their student loans, including federal, with BND.

The DEAL One Loan is credit based, meaning that if the borrower does not meet the credit criteria, they need a creditworthy cosigner. The cosigner pledges to pay back the loan if the borrower does not.

The application process

There are application steps the borrower and cosigner (if applicable) need to complete. Click here to learn about DEAL One Loan application steps.

Repaying a DEAL One Loan

Repayment of a DEAL One Loan begins approximately 30 days after the loan is made. If the borrower does not make the payments, the cosigner is jointly responsible for paying back the debt. Click here to learn about repaying a DEAL One Loan.

Additional Information About Cosigning

Does BND always require a cosigner?

A cosigner is required if the student borrower does not meet credit criteria. For many students, they are too young to have established a strong credit rating, so a cosigner is often needed.

Can a cosigner be released?

 To be released as the cosigner from a loan, each of the following requirements must be met:

  • The borrower must submit the appropriate request for release of cosigner form.
  • The borrower must meet BND’s current credit and eligibility criteria in effect at the time the request is made. 
  • The borrower must reside in the U.S.
  • The appropriate number of consecutive, regular on-time payments must have been made to BND.
    • For DEAL and CEAL Student Loans and Addiction Counselor Internship Loans, 24 consecutive, regular on-time payments are required.
    • For DEAL Consolidation or DEAL One Loans disbursed on/after January 1, 2013, 48 consecutive, regular on-time payments are required.
    • For DEAL Consolidation Loans disbursed prior to January 1, 2013, 24 consecutive, regular on-time payments are required.
  • A regular on-time payment is a payment received within 15 days of the due date while in repayment status. This does not include payments made during forbearance or deferment periods.
  • The payment counter restarts if there is a period of reduced payments, deferment, forbearance or a payment is received more than 15 days past the due date.
  • Overpayments made during the repayment period can count toward the on-time payment counter for cosigner release. However, the request for cosigner release can only be made after the required 24 or 48 consecutive on-time billing periods have been satisfied.

How can I check the status of the loan I cosigned?

One of the best ways to check the status of the loan you cosigned is by creating an online account and logging in periodically. Click here to learn more about managing the student loan online.

What happens if the borrower does not make payments?

The cosigner is responsible for paying back the debt. If a loan becomes 30 or more days delinquent, it will be reported as late and will appear on the cosigner’s credit report, possibly damaging their credit and perhaps their ability to qualify for new credit. If left unpaid, it could lead to collection accounts and further damage their creditworthiness.