What Happens to Student Loans When You Die?

In many cases, federal student loans are discharged when the borrower dies, meaning your family won’t be responsible for repayment. However, private student loans have varying policies, and some may still seek repayment, especially if a cosigner is involved. Knowing what to expect can help your family take the right steps and avoid additional stress.

We’ll guide you through what happens to different types of student loans upon death and the actions your loved ones may need to take. We’ll also explore ways to safeguard your family from potential financial impact, ensuring they have the support they need during a challenging period.

What happens to your student loans when you die?

When you pass away, your loved ones may be left to navigate your financial affairs, including any outstanding student loans. Understanding what happens to these loans can help provide peace of mind and protect your family or cosigner from unexpected financial burdens during an already difficult time.

If you have federal student loans, the balance is discharged upon death, providing immediate relief to your family. Parent PLUS loans, taken out by parents to support your education, are also forgiven if either the student or the parent borrower passes away.

Private student loans, however, are more complex. Whether these loans are discharged depends on the lender’s policies and whether a cosigner is involved. This can leave your family or cosigner in a difficult position, often at a time when they need compassion and clear guidance the most.

The following table provides an at-a-glance view of what happens to student loans when you die by loan type. We’ll go into more detail about these loan types in the following sections, so keep reading to learn more.

Loan type	Discharged at death?
Federal student loans	Yes
Federal parent PLUS loans	Yes
Cosigned private student loans	Maybe
Non-cosigned private student loans	Maybe
Private parent student loans	Maybe

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How Student Loan Debt Can Affect Your Life

What happens to federal student loans when you die? 

Federal student loans are discharged when the student dies. Not only are the federal student loans held by the student discharged, but if the parents took out a Parent PLUS loan, this will also be discharged upon the student’s death. 

If the student dies and has outstanding federal student loans, follow this process to get them discharged: 

1. Obtain a copy of the student’s death certificate. You’ll need to provide the loan servicer with proof of death for the loans to be discharged. So ensuring you have a copy of the student’s death certificate should be your first step. 
2. Contact the loan servicer. If you don’t know what loan servicer has been assigned to the student’s loans, you can contact the Federal Student Aid Information Center by calling 1-800-433-3243 to ask how to get this information. 
3. Provide the required documentation. Ask the loan servicer what you need to do to provide proof of death and follow the process. Once you provide the loan servicer with the required documentation, the loans will be discharged. 

While the time it will take to complete will vary by the loan servicer, you can expect it to be relatively fast after you’ve provided the required documentation—often days or weeks. You can expedite the process by providing accurate and complete proof of death documents as soon as possible. 

What happens to private student loans when you die?

What happens to private student loans will depend on the lender, whether you have a cosigner, and the loan agreement terms. Some private lenders discharge or forgive the loans upon the student’s death, whereas others may require the surviving spouse, cosigners, heirs, or estate to repay them. 

You’ll need to contact the lender to inquire about its policies and determine what’s required. In some cases, all you need to do is provide proof of death, generally a death certificate, to have the student loans discharged. In other cases, you may need to apply for loan forgiveness. 

While each private student loan lender has its own policies, the lenders we evaluated tend to discharge or forgive student loans upon the student’s death, regardless of whether there is a cosigner. The policies we found for several popular lenders are provided in the following table:

Lender	No-cosigner discharge upon death?	Cosigner discharge upon death?
Ascent	Y	Y
College Ave	Y	Y
Discover	Y	Y
Earnest	Y	Y
Funding U	Y	Y
Sallie Mae	Y	Y
SoFi	Y	Y

What happens to cosigners when a student loan borrower dies? 

The two typical outcomes when a student loan borrower dies and there’s a cosigner are:

1. The loan is forgiven or discharged, meaning it doesn’t need to be repaid. 
2. The cosigner is responsible for repaying the loan.

Federal student loans don’t have cosigners, and they are generally forgiven upon the student’s death, so this issue doesn’t apply to this type of loan; it only applies to private loans.  

Anytime you serve as a cosigner on a loan, you should go into it with the expectation that you’ll need to repay the loan if the borrower doesn’t, even if it’s because of their death. You can expect the loan agreement to specify cosigner obligations in the case of this event.

Upon the student loan borrower’s death, the first step is to read the loan agreement to understand the cosigners’ responsibilities and obligations. Once you’ve done this, the next steps are to:

1. Contact the lender and provide proof of death. Regardless of whether you need to repay the loan, you must inform the lender of the student’s death. You’ll generally be required to provide a death certificate. 
2. Plan for loan repayment. Depending on the loan’s terms, the lender may forgive the balance with no repayment requirement, or you might be required to repay the debt in full immediately or over time. If repayment is required, you must figure out how to do so.  

If you’re required to repay the debt and you’re having trouble doing so, the lender may be willing to work with you. For instance, the lender may offer a forbearance of 60 to 90 days (or more) to give you time to collect life insurance proceeds. It might also offer a modified payment plan.

The key is to communicate with the lender. You’re dealing with a difficult situation, and the lender will likely want to help you navigate it. If the lender doesn’t know what’s going on or that you’re trying to find a solution, it won’t be able to help you.  

Regardless of the outcome, remember to turn to experts if you need help, support, and guidance on handling the situation. You may find it helpful to contact an estate attorney or a financial professional for advice. 

What happens to student loans when you die and are married? 

If you die and you’re married, what will happen to your student loans depends on the types you have outstanding. Federal student loans of the deceased spouse will be discharged and won’t need to be repaid. You may or may not need to repay any outstanding private student loans.  

Some private lenders will discharge the loans upon the student’s death. Others may require any loan cosigners, such as a spouse or parent, to repay the loan immediately. Death is commonly considered an event of default. 

Plus, if you live in a community property state, the student loans might be the responsibility of the surviving spouse, even if they weren’t a cosigner on the loan. The same is true of other types of loans the deceased spouse might have had outstanding. 

After you’ve identified the types of outstanding student loans for your deceased spouse, the next steps are to: 

1. Gather documents so you can prove your spouse is deceased. For instance, a death certificate is commonly used to provide proof of death. You should expect to be required to do this for any outstanding loan, so have multiple copies on hand. 
2. Contact your lender or loan servicer. No matter the type of student loan your spouse had outstanding, you must let the company know your spouse is deceased. Follow the process specified by your lender or loan servicer to share this information.
3. Wait for the lender or loan servicer’s decision. Federal loans are discharged once proof of death documents are provided and reviewed, which could take days or weeks. For private loans, the process and timing will vary depending on the loan terms. 

For private loans, it’s crucial to contact the lender as soon as possible because the surviving spouse may be required to repay them. 

Communication is critical to navigating this difficult situation. If you can’t immediately repay the loan and this is required, make the lender aware of your situation. The lender may be willing to give you extra time to repay the loan or set up a payment plan. 

If you have any questions about what you’re required to repay after speaking with the lender, contacting an estate attorney or financial professional can also be helpful.

How to shield your cosigner or family from your student loan debt

If you only have federal student loans, your debt is fully discharged once proof of death is provided to your loan servicer by your family. Making it easy for your family to find your loan servicer’s name and contact information could ease the burden as they navigate this process. 

As you’re considering private student loans, keep in mind that cosigners agree to repay the debt if you cannot do so. While some lenders don’t require cosigners to repay the student loan debt if the borrower passes away, this isn’t always true.

Before having someone cosign your loan, make sure to read the loan agreement so you know what might happen in such a situation. If you already have a cosigner and aren’t sure what’s required, read your loan agreement or ask your lender to provide details.  

Other actions you can take to shield your family or cosigners from your private student loan debt include the following:

• Ask your lender to release your cosigner. Depending on how long you’ve had the student loans and whether you have a steady source of income, your lender may be willing to release the cosigner. Contact your lender to understand the process and requirements.
• Take out a life insurance policy. If you can’t release your cosigner or think your family might be responsible for your private student loans, consider getting a life insurance policy sufficient to cover the balance with your loved ones listed as the beneficiaries. 
• Contact an attorney or financial professional. In some cases, getting advice from an expert can be helpful. Depending on the complexity of your financial situation, legal or financial advice from a professional might be needed to help you develop a solid plan.  

Life insurance can be used to cover student loan debt—ideally, a term life insurance policy that lasts the duration of the loan terms. Term policies are generally low-cost and more affordable than whole life policies. However, term policies expire. If there is an extension of the loan repayment term, it could be more advantageous to purchase a whole life policy, although depending on the individual’s financial circumstance it could be cost-prohibitive. To help mitigate the insurance expiring before the term of the loan ends, try to obtain a term that lasts 30 years or more (if the option is available).

Erin Kinkade, CFP®

Most importantly, have open conversations with your loved ones about your debt and how it might affect them in the event of your death. By keeping them informed about your finances, you’re helping ease the burden of a difficult situation. 

Federal student loans are discharged without any tax implications, but private student loans may differ so it is important to contact the provider to understand the taxation of discharged private loans at the borrower’s death. In addition, state tax laws vary from federal tax law so the families should inquire about the state’s tax treatment as well.

Erin Kinkade, CFP®

FAQ

Does your family need to pay taxes on discharged student loans?

No, your family typically does not have to pay taxes on discharged student loans. Federal student loans discharged due to the borrower’s death are not considered taxable income, meaning your family or estate won’t face a tax bill for the forgiven amount. 

The Tax Cuts and Jobs Act (TCJA) of 2017 made this tax exemption for discharged student loans permanent through 2025. However, private student loans depend on the lender’s policies and the state tax laws. While many private lenders follow similar guidelines, confirming with a tax professional regarding specific situations is always wise.

Who do I notify if a federal student loan borrower dies?

If a federal student loan borrower dies, you or a representative should notify the loan servicer that manages the borrower’s account. To find the servicer, you can log into the borrower’s Federal Student Aid (FSA) account, where the loan details and servicer information are listed. 

You can also check previous loan statements or emails for the servicer’s contact information. Once you locate the servicer, you will need to provide a certified copy of the borrower’s death certificate. The servicer will then handle the discharge of the loan.

How do I let a private student loan company know the borrower died?

For a private student loan borrower, notify the specific lender or loan servicer handling the account. To find out who the lender or servicer is, review the borrower’s loan documents, emails, or bank statements for information. 

The borrower’s credit report will list any outstanding loans and their associated lenders, which you can request from a credit reporting agency. Once identified, contact the lender or servicer and provide a certified copy of the death certificate. The lender will inform you of its specific process, which may vary by company. Some private lenders may offer loan discharge upon death, while others may seek repayment from a cosigner or the borrower’s estate.

Do children inherit student loan debt?

In most cases, children do not inherit student loan debt. Federal student loans are typically discharged when the borrower dies, meaning the debt is forgiven and the estate or heirs are not responsible for repayment. 

However, private student loans may vary depending on the lender’s policies. Some private lenders may discharge the loan upon the borrower’s death, but others may seek repayment from a co-signer or the borrower’s estate, so it’s crucial to review the loan terms.

Do my parents need to keep paying on parent student loans for me if I die?

No, your parents are usually not responsible for repaying parent student loans if you die. If your parent took out a federal Parent PLUS loan to fund your education, that loan will be discharged and not require repayment if you die. 

To this point, federal student loans, including Parent PLUS loans, are discharged upon the student’s death or, in the case of Parent PLUS loans, the death of either the parent or the student. The terms of private loans can vary based on the loan agreement, especially if a cosigner is involved.

What debts are forgiven at death?

Certain debts may be forgiven upon death. Federal student loans, including Parent PLUS loans, are discharged when the borrower or the student for whom the loan was taken out dies. Some private student loans may be forgiven upon death, but this varies by lender. 

Other debts, such as credit cards or mortgages, are generally not forgiven and may be settled through the borrower’s estate. Any remaining assets are used to pay off these debts, but the estate’s beneficiaries typically do not inherit the debt unless they are cosigners or joint account holders.