When you take out student loans, you’re responsible for paying your outstanding balance. But what happens to student loans when you die? Do they die with you or live on? It depends on the type of student loans you have, whether they are private or federal.
What Happens to Federal Student Loans When You Die?
While private student loans have different rules depending on the lender, federal loans from the U.S. Department of Education have unvarying rules when it comes to the death of the borrower.
As long as the loan servicer receives proof of death, federal student loans will be discharged. Federal protections also apply to parents who take out parent PLUS loans. If the parent or the student on whose behalf the PLUS loan was taken out dies before the loan is repaid, the loan will be discharged. But the discharge is not guaranteed until acceptable documentation is submitted to the loan servicer.
Acceptable documentation includes the original death certificate, a certified copy of it or an accurate and complete photocopy of either. However, if the loan was refinanced into a private loan, federal protections disappear, no matter if documentation was provided.
What Happens to Private Student Loans When You Die?
The answer largely depends on your lender’s policy and your loan agreement.
“When it comes to private student loans, what happens after a borrower passes away really depends on the lender and the specific terms of the private student loan — and unfortunately, there’s no one-size-fits-all answer,” says Becca Craig, certified student loan professional and certified financial planner at Focus Partners Wealth. “Some lenders, like Sallie Mae, might offer a death discharge, meaning the loan is forgiven if the borrower passes away. But that’s not guaranteed.” Craig notes that a death discharge would be part of the loan agreement, not required by law.
Private student loan lenders don’t have a legal obligation to discharge loans upon a borrower’s death, according to the Consumer Financial Protection Bureau. The lender may try to recover the funds through the borrower’s estate after their death.
“So if there are assets like a home or bank accounts, the lender could try to collect what is owed through a probate process. But if the estate doesn’t have the money, and no one else is on the hook legally, like a cosigner, the lender may end up writing off the debt,” says Craig.
For families dealing with a lender without a death discharge benefit, “contact the lender’s ombudsman and ask for a compassionate review, especially if the borrower was a member of the U.S. armed forces or a first responder,” says Mark Kantrowitz, author of “How to Appeal for More College Financial Aid.”
[Read: Best Student Loan Refinance Lenders.]
Do Cosigners Have to Pay for Private Student Loans After the Borrower Dies?
For federal student loans, cosigners are never required and are completely discharged upon the death of the borrower, but private student loans are different. A large majority of private loans have a cosigner attached to them. From a legal standpoint, cosigners share the responsibility of repayment for the private student loans. But what happens to student loans when you die and have a cosigner?
“In some cases, the cosigner’s repayment obligation is canceled when the borrower dies, and sometimes not. You need to read the fine print when borrowing the loan,” says Kantrowitz.
Your cosigner could be at risk after you pass away. However, it depends on when the private loans were taken out. Section 601 of the Economic Growth, Regulatory Relief, and Consumer Protection Act amended the Truth in Lending Act and now releases the cosigner’s obligation upon a borrower’s death. But only private student loans taken out after Nov. 20, 2018, are eligible for this benefit, according to the National Consumer Law Center.
It’s also important to note that if the cosigner of the loan passes away, the primary borrower or student is still responsible for repayment.
[Read: Best Parent Student Loans: Parent PLUS and Private.]
Does the Spouse Have to Pay for Private Student Loans After the Borrower Dies?
If you’re married and have private loans, what happens to the loans when you die depends on a couple of factors. First, a spouse who cosigned the private loans may be responsible for repayment upon the primary borrower’s death.
A spouse who didn’t cosign private student loans that were taken out before marriage should be in the clear and not held responsible for the outstanding balance.
But if private student loans were taken out while married, spouses are responsible for payment in some circumstances — even if they didn’t cosign the private student loans.
“In community property states like California or Texas, a surviving spouse might be held liable even if they didn’t cosign,” says Craig.
Are Discharged Student Loans Taxed?
If private student loans get discharged when the borrower passes away the forgiven amount is not taxable thanks to the Tax Cuts and Jobs Act. This provision was set to expire at the end of 2025, but was renewed by the One Big Beautiful Bill Act.
Federal student loans that are discharged due to death are also not taxed.
[Read: Best Student Loans for Bad Credit. ]
What to Do After a Student Loan Borrower Dies
After a student loan borrower dies, the family should obtain a valid death certificate as proof. Once that is available, it’s important to inform the lender that the primary borrower has passed away.
If it’s a private student loan, make sure to ask the lender if it provides a death discharge benefit. If it does, request written confirmation for your personal records. If there isn’t a death discharge and there is a cosigner or spouse who’s potentially responsible, ask about next steps and how to proceed with repayment.
3 Ways to Protect Cosigners and Family
If you’re a student loan borrower, the last thing you want to do is burden your family with your remaining debt should the unthinkable happen. Here are three ways to protect your cosigners and family.
1. Apply for cosigner release. See if your private lender offers cosigner release. Typically, you must meet the lender’s underwriting criteria for primary borrowers. Additionally, you must make a minimum number of payments before you apply and get approved.
2. Refinance student loans. If your lender doesn’t offer cosigner release, there’s another option. You can refinance your student loans, which creates another loan and pays off your old one. For this to work, you need to meet the refinancing lender’s eligibility requirements.
3. Look into life insurance. Lastly, you may consider other financial products to help cover any risks. “Get a term life insurance policy on the student in an amount equal to the amount borrowed and with a term equal to the repayment term of the loan. Such life insurance policies will be inexpensive, since the student is young and presumably healthy,” says Kantrowitz.
More from U.S. News
Parent PLUS Loans vs. Private Student Loans: Compare Your Options
What Student Loan Protections Can We Lose if the CFPB Goes Away?
Parent PLUS Student Loan Forgiveness: What You Should Know
Do Private Student Loans Go Away When You Die? The Answer Is More Complicated Than You Think originally appeared on usnews.com
Update 06/18/26: This story was previously published at an earlier date and has been updated with new information.
