What Happens to Student Loan Debt When a Borrower Dies?

When a borrower dies, the question of what happens to student loan debt can be confusing and difficult to answer. Student loans are a type of debt that is not always discharged in bankruptcy, making it even more important to understand how they might be handled upon death. Generally speaking, the responsibility for paying off student loan debt falls solely on the deceased debtor’s estate and family members may become financially responsible if they are cosigners on any loans.

The first step in determining what will happen to the remaining student loan debt is identifying who holds the original loan paperwork. Depending on whether it was federal or private student loans, there will be different ways of handling them after death. Federal loans may be eligible for total discharge while private lenders may choose to collect from whoever inherits the borrower’s assets at death.

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