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Student loans are a way to finance your education, but they can also be a huge burden. If you’re struggling with student loan debt, don’t worry: you’re not alone. According to the Federal Reserve Bank of New York, more than 40 million Americans have student loan debt.

Student loans die with you when you die. If you pass away, your estate will be responsible for paying off the balance of your loans—but only if those loans were not co-signed by someone else who is still alive.

If you co-signed (or cosigned) a loan, then that loan is not considered part of your estate. In other words, if you co-sign a student loan and later pass away, the co-signer will still be responsible for paying off all remaining balances on those loans.

Do student loans die with you?

Have you ever wondered what happens to your student loan if you die before it’s paid off? We take a look at what happens to student loans when you die.

Do your student loans disappear when you die if you haven’t paid them off? We take a look at how the student loan system works when the loanee dies, and how to report a death to the Student Loans Company (SLC).

What happens to student loans when loanees die?

When someone dies, the SLC cancels the student loan. It doesn’t matter how much of the loan remains outstanding – the SLC writes off the debt. So, essentially, if the loanee never earns above the repayment threshold, they could die without ever making a student loan repayment.

Do all loans disappear like this when someone dies? No.

Normally, debts become liabilities on their estate. In other words, their executor must pay these debts from the assets in their estate before they can pay out any inheritance. So, if they don’t have many assets but have a few debts, there will be less for people to inherit.

Generally speaking, if there isn’t enough money to cover the debts, creditors should write them off, but they’re not automatically wiped like student loans are.

Who tells the SLC about the death?

Well, technically anyone can notify the SLC about a death. However, it makes sense for the executor to contact the SLC since they’re the person responsible for managing the loanee’s affairs when they die.

The SLC won’t cancel the debt without evidence, though. So, if you’re an executor and you need to notify the SLC about a death, you’ll need two things:

1. The person’s Customer Reference Number
2. Evidence of the death

You can find the Customer Reference Number on old correspondence from the SLC. If you can’t find it, contact the SLC for more guidance.

To prove the death, send the SLC one of the following:

• Original death certificate
• Copy of a foreign death certificate
• The original interim certificate from the coroner
• A stamped copy of the coroner’s interim certificate

Once the SLC receives your evidence, they’ll cancel the loan and advise you when everything’s completed.

When are student loans written off?

Death isn’t the only occasion when student loans ‘disappear’. Here’s when else it happens.

• If the loanee becomes permanently unfit to work, the SLC may cancel their student loan. Again, though, they’ll need supporting evidence for the claim.
• Student loans are usually cancelled after 25 or 30 years depending on the loanee’s student loan plan, or when they turn 65 – whichever comes first.

So, if you’re an executor, you can check with the SLC to see if a loan is still actually payable before you send over any supporting evidence.

What happens to federal student loan debt when you die?

If you die, your federal student loans will be discharged, meaning no further payments will be required. Your parent, spouse or another person you appoint will need to submit proof of death to your loan servicer. This means an original or copy of the death certificate.

Federal parent PLUS loans will also be discharged if the parent borrower dies or if the student whom the parent borrowed the loan for dies.

What happens to private student loan debt when you die?

If you die with private loan debt, its future will depend on the lender’s policy.

Private loans you took out on your own are likely to be forgiven. (Ask your lender about its death discharge policy.) But a private loan that is co-signed by a parent or someone else might not.

Co-signers are just as responsible for the loan as the student is. If the student dies, the co-signer is obligated to repay the loan unless the lender has a policy stating otherwise.

This applies to most existing loans, but not to new loans. All loans taken out after Nov. 20, 2018, must release a co-signer in the event of the student borrower’s death, due to a provision in the Economic Growth, Regulatory Relief, and Consumer Protection Act.

If you have a loan that was issued before Nov. 20, 2018, and your lender doesn’t have an official discharge policy, there is still recourse. The lender will have a process in place called “compassionate review” that could still result in your loans being forgiven or co-signer released, says April Query, regional and community services manager for College Foundation of North Carolina. Contact your lender to find out what the process entails.

What happens to your parents’ loans in case of death?

Federal direct PLUS loans will be discharged if a parent borrower or student the PLUS loan was taken out for dies. Proof of death must be submitted to the servicer in the form of an original or copy of the death certificate.

If you have a private parent loan, contact your lender to find out its policy.

Do I have to keep paying my student loan if my parent or spouse dies?

Yes, if your parent or spouse dies, you will still have to repay your student loans. Even if your parent or spouse was helping you with payments, you are still legally bound to repay the loans.

Will death trigger a student loan tax bill?

Unlike some other debt forgiveness programs, death or disability discharge will not trigger a tax bill. The Tax Cuts and Jobs Act of 2017 included a provision that made student debt that is discharged due to death exempt from taxes. This rule is in effect until 2025 and applies to all federal and private student loans.

What you can do to protect your family

To avoid any headaches for your estate, there are steps to take now to protect your loved ones.

Talk to your parent (or someone else). If you have federal loans, tell your parents who your servicer is and how to contact them so they’ll know where to send a death certificate. The same goes for any private debt. It’s an uncomfortable talk, but it’s necessary.

“Otherwise the parent might not know who to reach out to,” says Query.

If you don’t want to burden your parents with this responsibility — “I could see a parent completely forgetting to go and do that,” says Query — you can ask someone else. She suggests finding a backup family member or friend to submit a death certificate to your servicer. You can ask someone or appoint them officially in your will.

Consider death discharge policy when comparing private loans. This might not make or break your decision, but look for a lender that will discharge all debt for both you and your co-signer.

Check your private lender’s policy. If you have existing private debt, your options will depend on your lender’s policy. If it has a discharge policy that doesn’t include your co-signer, find out if co-signer release is available to get them off your loan for good.

Consider refinancing. You can refinance with a private lender that has co-signer release or a policy of discharging debt for the co-signer in case of death if your current lender doesn’t offer this relief.

Take out a larger life insurance policy, as a last resort. If you don’t want to refinance or release your co-signer, Minsky suggests taking out a life insurance policy with a payout that your estate can use to cover your remaining debt.

Takeaway

Most debts don’t disappear when someone dies, so student loans are definitely the exception. Just remember to contact the SLC as soon as possible after the death, though. Otherwise, they’ll try to take payments from the deceased’s bank account as normal, which causes everyone extra stress during an already difficult time.

If you’re an executor and you need more advice about dealing with someone’s estate, reach out to a charity like Citizens Advice for more help, or get legal advice from a wills and trusts solicitor.

Do student loans die with you? The answer is yes, but with some caveats.

If you die without any outstanding student loan debt, your estate will have to pay off your loans. But if you have a cosigner on the loan, that cosigner will be responsible for paying off the loan instead of your estate.

If you were enrolled in an income-driven repayment plan when you died, and had made at least one monthly payment while on this plan, the government will forgive any remaining balance after death. However, if you were not enrolled in an income-driven repayment plan or had not made at least one monthly payment while on this plan, then any remaining balance after death will be due in full within 60 days of your death.