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If a student dies, what happens to their student loans?

skooliscoolskooliscool Posts: 38Registered User Junior Member
Specifically a large amount of non-federal private-student loans ($45,000) that were not co-signed by anyone and taken out by the student only. If the student passes away, does the debt get transfered over to the student's parents? Brothers and sisters? Keep in mind they didn't co-sign.

Also, does it matter how the student dies? Will the lender ever find out cause-of-death?

For example, lets say the student commits suicide --I'm just curious I'm not depressed or anything-- would this change anything?

thanks.
Post edited by skooliscool on

Replies to: If a student dies, what happens to their student loans?

  • sybbie719sybbie719 Posts: 16,984Super Moderator Senior Member
    I hope that you plan on living a long and healthy life. The answer is it depends, for some loans if the borrower dies, the loan is discharged. For other loans if the borrower dies, the bank can try to collect the debt from the estate.

    If the borrower dies, yes a death certificate must be produced and it will state the cause of death.

    As a student you are going going to be able to borrow so much money with out a co-signer (probably no more than 3 to 4000 per year) so it is unlikely that you will have $45,000 worth of debt without a co signer.
  • skooliscoolskooliscool Posts: 38Registered User Junior Member
    Yeah the $3-4k/year limit is for federal loans I believe. Again, these are private loans. I've had no trouble having the bank issue $10,000 checks to my name per semester with simple paperwork and 2 years of credit history --so yes $45,000 worth of debt without a co signer is very possible -and the unfortunate reality in my case.

    So I guess I should just call the bank and ask?
  • merlinjonesmerlinjones Posts: 807- Member
    NO

    DO NOT THINK IN TERMS OF WHAT WILL HAPPEN IF I DIE AND ALL OF THAT

    There are soo many different payment options for students loans, that you should not worry about it. Please stop thinking in terms of what becomes of your debt when you die.

    You better shape up. You better live a long time or I will kick your ass. Do not fret over the loans. All banks and all student loan companies work with folks very well. You would be surprised how low your student loan payment can go if you play things smart.

    Do not make me kick your ass.

    Is there anything you want to elaborate on with the loans and all? There are folks here who will try and help you. You can PM me and I will try to help you. One of my jobs is working as a Volunteer Chaplian, so I help folks all of the time and will gladly try and help you. Or, there is always the ass kicking option:)
  • willpower102willpower102 Posts: 212Registered User Junior Member
    i think it's a legitimate question. I've thought the same thing before, cause man would that suck for them. (i'm accident prone) :)
  • calmomcalmom Posts: 16,838Registered User Senior Member
    I believe that student loans like Stafford are discharged in the event of the death of the student -- as are parent PLUS loans.
  • hsmomstefhsmomstef Posts: 3,579Registered User Senior Member
    with private loans, the issuing bank or agency will file paperwork for a claim against the estate. If the estate is worth $0, they won't get anything.
  • collegemom4collegemom4 Posts: 80Registered User Junior Member
    This is a disturbing post - I'm not sure if it's a simple request or a flag that someone is feeling overwhelmed. I hope the former...........

    This is a complicated issue...it definitely matters how a person dies. My sister was killed while some men robbed the place where she worked. My parents misinterpreted some wording in her policies when they said if she was killed "during an illegal act" to mean that her policies wouldn't pay out since she was killed while someone was committing an illegal act. What it really meant was if "she" was involved in the illegal act they wouldn't pay out. So generally, if a person is killed or dies while in the act of an illegal activity (suicide definitely counts), any insurance policies wouldn't kick in and loans would not be discharged.
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