Student loan debt has become on of the most talked about issues in America due to the massive yoke it places around a young person’s financial neck for years and potentially the rest of their life. But what happens to that debt upon the death of the obligor? That questions depends on the institute that has lent the money. For loans made through the federal government, the death of the borrower will cause the loans to be discharged as long a death certificate is provided. However, private lenders may not be so generous with many going after the estate and insurance of the deceased and some even targeting a surviving spouse in community property states. As a result, it is always important to know the death rules for any student loans that a person might have and plan accordingly. The last thing anyone wants after the death of a loved one is to face having to pay back a huge loan that is almost impossible to discharge due to the heavy statutory protections student loans currently receive.
See Rekesh Sharma, What Happens To Your Student Debt If You Die?, Investopedia, October 30, 2015.
Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.
