Student Loans Not Forgiven Upon Student’s Death

After completing three years towards his degree, Christopher Bryski died in July 2006. He left behind federal student loans, private student loans, and two small credit card bills. Upon receiving a death certificate, the federal student loans and the credit card bills were forgiven. But the private student loans were not.

Private student lenders don’t inform co-signers of their obligations upon the death of the primary borrower. Bryski’s family continues to make payments on his loans, and they will end up paying $85,800 (almost double the amount of the original loan) due to interest rate changes and increases associated with the forbearance periods.

Families currently looking for student loans should maximize federal borrowing options before turning to private lenders.  If they turn to private lenders, they should read the fine print and consider an insurance policy to cover the loans.

See Mary Pilon, When Student Loans Live on After Death, W.S.J., Aug. 7, 2010.