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What happens to your student loans if you die?
Most lenders say they discharge your debt. But your family may pay state taxes on what's forgiven.
Student loans don’t work like other loans do when you die. Federal and most private loans are canceled after a student dies — even if the loan involved a cosigner. Your cosigner might need to pay state taxes on the forgiven portion, however.
What happens to my federal loans if I die?
The Department of Education (DoE) discharges all student loans after the borrower dies. It means nobody in the family is responsible for paying off the debt. To qualify for discharge due to death, a relative must submit proof of death to your student loan servicer — the company you send your repayments to each month.
If you have Federal Perkins Loans, your servicer is the school you attended.
What counts as proof of death?
Federal loan servicers accept three main documents as proof of death:
- Original death certificate
- Certified copy of death certificate
- An accurate and complete photocopy of either one of these documents
No death certificate? Your servicer might accept other documentation as proof:
- Statement from the county clerk’s office stating the borrower is dead and the death certificate is not available
- Official letter from the funeral director or clergyman who performed the funeral
- Copy of a death announcement published in a local newspaper
Reach out to your servicer to learn if they have additional requirements for these documents.
What happens to Graduate or Parent PLUS Loans?
The federal government discharges Graduate and Parent PLUS Loans if the student or the parent dies. The procedure for getting your loans discharged is the same as any other federal loan.
While the IRS used to consider canceled debt taxable income, that’s no longer the case thanks to President Trump’s Tax Cuts and Jobs Act. This tax law lifted tax responsibilities on any student loan balances discharged due to death between January 1, 2018, and December 31, 2025.
This means parents are no longer responsible for paying federal taxes on the forgiven portion of any Parent PLUS Loans should you die. While parents might receive a Form 1099-C in the mail, they don’t need to file it with their tax return — though they should keep it for their records.
However, your parents may need to pay state taxes on the canceled portion of any parent loans they borrowed. Get in touch with a tax professional to learn more.
What happens if I had an endorser?
Your loans are discharged after you die, even if you took out a Graduate PLUS Loan with an endorser. Your family member needs to submit sufficient proof of death to your servicer. However, the endorser on your loan might be required to pay state taxes on the canceled debt.
What happens to private student loans if I die?
Many private student loan providers forgive student loans if the borrower dies — but not all of them. Lenders sometimes treat private student loans the same way they would other types of loans, meaning the debt becomes part of the deceased’s estate.
Lenders might come to the estate for full repayment of the debt — the assets that you left behind after you died. However, it’s not the responsibility of your family members to pay off the balance if their name isn’t on the loan.
Private lenders that forgive loans after the borrower dies
- Advantage Education Loan
- Citizens Bank
- Discover
- Earnest
- EDvestinU
- Iowa Student Loan
- NaviRefi
- PNC Bank
- Sallie Mae
- Wells Fargo
What if I had a cosigner?
It depends on your lender. Generally, lenders that offer death discharge waive the remaining balance, regardless of whether you had a cosigner. However, your loans probably may not be forgiven if your cosigner dies.
What if I’m the cosigner?
If you’ve cosigned student loans, you’re responsible for paying them off if the borrower dies. Reach out to the servicer as soon as possible to find out what the procedure is for handling the debt. In some cases, the servicer might ask for full repayment on the balance if the borrower dies.
Want to avoid this? Consider asking the borrower to apply for cosigner release as soon as they’re able to qualify on their own. If the lender doesn’t offer cosigner release, you might want to refinance with one that does.
How else can my student loans get canceled?
When it comes to federal loans, you can have your debt canceled, discharged or forgiven after specific changes to your health, finances or education.
| Type of discharge, forgiveness or cancellation | When it applies |
|---|---|
| Total and permanent disability discharge | You have a long-term disability that affects your ability to work. |
| Borrower defense discharge | Your school broke the law when issuing the loan or misled you about the academic program you enrolled in. |
| Bankruptcy discharge | You filed for Chapter 7 or Chapter 13 bankruptcy, though in rare cases. |
| Closed school discharge | Your school shuts down shortly after you withdraw or while you are on leave or enrolled. |
| False certification discharge | You received a federal loan you weren’t eligible for or didn’t take out. |
| Unpaid refund discharge | You withdrew from school before you completed your program. |
| Public Service Loan Forgiveness | You made 120 income-driven repayments while working a qualifying public service job. |
| Teacher Loan Forgiveness | You worked for five years at an eligible school. |
| Federal Perkins Loan cancellation | You worked or volunteered in an eligible position for four to seven years, depending on the program. |
When it comes to private lenders, you might be able to get your loan canceled if you become permanently disabled. However, not all lenders offer this option. Talk to your servicer for details on discharge and cancellation.
How to get your federal loans discharged
Compare student loan refinancing options
Updated April 5th, 2020
Bottom line
Your family isn’t responsible for paying off your student loans if you die. But for cosigners, things can get complicated. They might have to pay state taxes on the loan. And in some cases, the loan might become immediately due after you die. You can avoid this by applying for cosigner release or refinancing the debt in your own name.
Read our guide to student loans to learn more about how it all works.
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