Can You Transfer Student Loans to Another Person?

Transferring student loans to another person means shifting the responsibility of a student loan from one individual to another.

Maybe you’re a parent who took out a loan for a child and now wants to shift responsibility. Perhaps you’re looking into options to lower interest rates through refinancing and need a cosigner. Whatever the reason, keep reading to find out when you can transfer student loans to another person.

Understand student loan transfers

While transferring student loans may not be a common practice, understanding when it makes sense can be beneficial if you’re considering one of the following transfer scenarios:

Transfer loans from…	How common is it?
Parent to child	Most common
Child to parent	Least common (we could not find any lenders that state they allow it)
Spouse to spouse	Less common

You might see the appeal of transferring student loans in these scenarios, but it isn’t always straightforward or even possible. Keep reading for more insight into the process, including limitations and alternatives.

Can you transfer student loans to another person?

The short answer to whether you can transfer student loans to another person is that it’s complicated, and the possibilities depend on the type of student loan. 

Can you transfer federal student loans to another person?

No, you can’t transfer federal loans to another person unless you’re willing to refinance with a private lender. This will allow you to transfer the debt burden, but you’ll lose federal benefits if you refinance.

Can you transfer private student loans to another person?

Yes, you can transfer private student loans to another person in certain cases—such as transferring Parent PLUS loans to the child. Start by researching student loan companies that will consider your request. (Keep reading for three lenders we found that will allow it in certain situations.

The ability to transfer isn’t guaranteed; the person taking over the loan must qualify.

If you’re exploring the transfer of student loans, talking to your lender or a financial professional can guide you on what’s possible in your situation.

Remember, the rules governing student loan transfers can be intricate, and it’s essential to understand the legalities and potential risks before proceeding.

Methods to transfer student loans

Transferring student loans isn’t a straightforward process, but these methods that might work depending on the situation:

• Cosigner release: This method involves removing a cosigner from the loan, transferring responsibility. It works by demonstrating that the primary borrower can handle the loan on their own. For a cosigner release, the primary borrower must show a strong credit history and stable income. It’s mostly applicable to private student loans where a cosigner is listed. (Federal loans rarely require cosigners, aka endorsers.)
• Refinance into another person’s name: Refinancing allows you to replace a loan with a new one under different terms—and in this case, in another person’s name. Refinancing requires a solid credit score and stable income from the new borrower. The implications include changes in interest rates, terms, and losing federal loan benefits if refinancing federal student loans with a private lender.

Understanding these methods and discussing them with a financial professional can help you determine the best approach.

What lenders allow the transfer of student loans?

Transferring student loans is a specialized option, and not all lenders permit this practice—but these three do:

Lender	Best for
SoFi	Best online lender
ELFI	Best personalized support
PenFed	Best credit union

SoFi

View Rates

Best online lender

• Editorial rating: 4.9 out of 5
• No application, origination, or prepayment fees
• Return-to-school deferment

SoFi allows parents to refinance Parent PLUS loans into their child’s name. SoFi lets you choose between fixed or variable rates and offers multiple ways to lower your rate, giving you more control over your refinanced student loans.

Member benefits, such as referral programs and exclusive events, further enhance the SoFi experience. SoFi also allows for return-to-school deferment. If your child pursues an additional degree, they can temporarily postpone their payments to focus on their studies.

ELFI

View Rates

Best personalized support

• Editorial rating: 4.8 out of 5
• Assigns a Student Loan Advisor to assist with student loan transfer
• 12-month economic hardship forbearance

ELFI stands out for its personalized support, assigning applicants a dedicated Student Loan Advisor to see them through the process. This one-on-one guidance ensures a smooth refinance, particularly when transferring Parent PLUS loans to a child’s name. 

Borrowers must have earned at least a bachelor’s degree and have a minimum 680 credit score to qualify. You can check your rates before you apply, and if approved, you won’t pay application, origination, or prepayment fees.

PenFed

View Rates

Best credit union

• Apply in 15 minutes or less
• Allows spouses to consolidate student loans into both names
• Permits transfer of Parent PLUS loans into child’s name

Pentagon Federal Credit Union (PenFed for short) offers fixed rates starting at 7.74% APR, with no hidden fees or prepayment penalties. You can prequalify for PenFed student loan refinancing, and if you decide to move forward, you can apply in 15 minutes or less.

Not only can borrowers transfer Parent PLUS loans to their child, spouses can consolidate student loans into both their names, providing unique opportunities for financial management.

Other private lenders may allow these options or others. However, we couldn’t find a lender in our research that allows a child to refinance student loans in their parents’ name. Always consult individual lenders to be sure, and consider exploring our article on the best student loan refinance options for a starting point.

Pros and cons of transferring student loans

Transferring student loans can be a viable option for some but may also present risks and challenges. Here are the potential advantages and disadvantages for the transferor and transferee:

For the borrower transferring the loan:

Pros

• Relief from financial responsibility

  Transferring the loan allows the transferor to shed the monthly payment obligation.

• Potential credit score improvement

  Without the debt, the transferor’s credit utilization may decrease, which might improve their credit score.

Cons

• Loss of benefits

  Federal loans offer certain protections and benefits you could lose when transferring to another person.

• Legal complexities

  Depending on the method, transferring loans might involve legal complexities that require careful consideration.

For the borrower the loan is transferred to:

Pros

• Consolidation opportunities

  The transferee may consolidate the loan with their own student loans, potentially simplifying their financial management.

• Potential lower interest rate

  The transferee might secure a lower interest rate if refinancing, depending on their creditworthiness.

Cons

• Increased financial responsibility

  Assuming someone else’s debt adds to the transferee’s financial responsibilities and might affect their credit score.

• Potential legal responsibilities

  Accepting the transferred loan may entail legal obligations and requires caution and understanding.

Ask the expert

Erin Kinkade

CFP®

To minimize risks to both parties, make sure the transfer can be done and discuss changes with the cosigner or person the loan will be transferred to to ensure there are no surprises. Then, research viable options to determine what you can afford. Consult a financial professional for additional guidance. Try not to make an emotional decision. A financial professional can help address the emotional and financial reasons behind wanting to refinance or transfer your loan, and can work with you to create a well-thought-out plan that weighs the pros and cons, and considers the actual numbers and how the decision affects your current financial condition and financial goals.

Alternatives to transferring student loans

Transferring student loans isn’t the only way to manage the financial burden. Here are two alternative strategies borrowers and cosigners might consider. 

Repayment assistance

Various programs can help you with your student loan repayment, especially if you have federal loans:

• Income-driven repayment plans: Federal loans offer repayment plans based on your income, potentially reducing monthly payments.
• Loan forgiveness programs: Some professions qualify for forgiveness programs, where part or all of your loan may be forgiven.
• Deferment or forbearance: Pausing payments through deferment or forbearance can provide short-term relief, but interest might continue to accrue.

Refinancing options

Refinancing your student loans can lead to more manageable payments:

• Lower interest rate: By refinancing with a private lender, you might secure a lower interest rate, reducing the total interest paid over the life of the loan.
• Altering loan terms: Extending the loan term can lower monthly payments but may increase total interest. A shorter term can save on interest but increase monthly payments.
• Potential loss of federal benefits: Refinancing federal loans with a private lender will cause you to lose federal protections and benefits, so weigh this decision carefully.

How to transfer student loans to another person

Transferring student loans is a complex process that involves several steps. Here’s a detailed look at what you need to do if considering this option:

1. Review loan agreements

• Understand current terms: Know your current loan’s interest rates, terms, and benefits, so you can compare them to the new loan’s terms.
• Check for penalties: Ensure no penalties or fees are associated with transferring the loan to another person.

2. Consult a financial expert

• Get professional guidance: Speak with a financial expert to understand all the legal and financial implications of transferring a student loan.
• Seek customized advice: Every individual’s financial situation is unique, and professional guidance can tailor advice to your needs.

3. Follow lender guidelines

• Read lender policies: Each lender will have specific rules and requirements for transferring a loan.
• Complete necessary paperwork: Gather all required documents, and fill out the necessary forms accurately.

Transferring student loans may seem feasible, but it requires careful consideration. The methods of transfer vary and are associated with specific risks and alternatives. Weighing these factors and consulting with a financial professional is vital to make an informed decision.

Transferring student loans to another person is possible in some cases, but it’s not always the best solution. Understanding the methods, pros and cons, and alternatives—and seeking professional guidance—will help you make the best decision.

FAQ

What types of loans can be transferred?

When transferring student loans, the options are limited to private student loans. Here’s a breakdown:

• Private student loans: Some private lenders, such as SoFi, ELFI, and PenFed,  may allow the transfer of student loans between individuals, such as from parent to child or between spouses.
• Parent PLUS loans: These can be transferred to the child’s name through refinancing with specific private lenders.
• Spousal consolidation loans: In some instances, spouses can consolidate student loans into both names.
• Federal student loans: These cannot be transferred to another person except in specific circumstances. (See below.)

What are the legal implications?

Transferring a student loan involves legal obligations and potential risks for the transferor and transferee:

• Contract obligations: A new contract will be created, binding the transferee to the terms and conditions of the loan.
• Credit impact: The transferee’s credit may be affected, depending on whether the transferor makes on-time payments.
• Potential loss of benefits: The transferor might lose specific loan benefits, protections, or terms that were part of the original agreement.
• Legal responsibility: The transferee assumes all legal responsibilities for the loan, including repayment and potential default consequences.

Can federal loans be transferred?

Transferring federal student loans to another person is rarely allowed. The only exception might be in the case of a spouse’s death or a spousal consolidation loan that occurred under specific programs no longer available. 

Even in those rare cases, the process is restrictive and comes with specific conditions. For most borrowers, transferring federal student loans to another person is not viable.

Recap: Best lenders for transferring student loans

Lender	Best for
SoFi	Best online lender
ELFI	Best personalized support
PenFed	Best credit union