What Happens To Student Loans When You Die?

You might worry that you’re passing student debt obligations onto your family or cosigners upon your death. Especially since student loan debt totals over $1.6 trillion as of a February 2025 report. However, federal student loans currently have discharge policies, meaning the loan terminates upon your death. Many private loans do as well. This is not always the case, however, and you will need to work to protect your family and cosigners from student debt obligations in the event of your death.

What happens to private student loans if the borrower dies?

Many private student loans may be discharged due to death as long as there is documentation, usually a death certificate. It’s not a requirement for lenders to offer this discharge, however, so there’s a chance that you could run into a lender that doesn’t offer this option.

There could also be complications if you have a cosigner. Some companies will discharge a loan only if the primary borrower dies. Earnest, for example, has a discharge in the event of the primary borrower’s or student’s death.

The same applies to SoFi — if a cosigner dies, the other surviving borrower might be responsible for continuing payments. With some lenders, it’s possible that cosigners will need to take on responsibility for the loan even if the primary borrower dies.

Some rules are murky depending on the loan you take out. For instance, if a parent borrows for a child and the child dies, the parent could be responsible for the payments. Sometimes, if the parent dies, the child is on the hook for those payments.

What happens to federal student loans if the borrower dies?

When a person who borrowed federal student loans dies, those federal student loans will be discharged. In every instance, proof of death in the form of a death certificate is required for this discharge.

If a parent takes out a parent PLUS loan and they die, or if the student dies, that loan will be discharged as well. A child won’t be responsible for those loans when a parent dies.

How do you protect your family or cosigner from student loan burdens if you die?

It can be tricky to make sure your family or cosigners are protected from paying back student loans in case you die. However, federal law from the Tax Cuts and Jobs Act states that private lenders must release cosigners in the event of a primary borrower’s death as long as that loan was received after Nov. 20, 2018.

You might also look into getting suitable term life insurance to cover student debt costs in case you have a private loan that does not discharge after your death.

If you’re still looking for loans, read the discharge policies of the loan and try to avoid loans that do not discharge upon your death. And if you are already considering refinancing your student loans, check to see if you qualify with a lender that offers discharge policies. Just make sure you’re getting the best refinance rate available with that lender.

How do you report a death to a student loan servicer?

If you’ve gotten letters from a student loan servicer on behalf of someone who has passed away, you’ll need to contact that lender to report the death. Call the number on the letter and, if you have them handy, provide the account details so it’s easy for the customer service representative to find the account.

On the call, say that the person has passed away and give details of the death. The loan servicer representative will most likely request a copy of the death certificate by either mail or email.

Record details of your phone call, including who you spoke to and when you spoke to them. Make sure that you know the deadline of when you need to submit the paperwork and get a timeline for when you can expect a response about the discharge. Also ask what happens if it gets denied so you’re prepared for other options.

Bottom line

The good news is federal student loans discharge upon your death, as do many private loans. However, it’s important to check the loan contract to understand your discharge policies if you have them. If your loan does not discharge in the event of your death, you might look into refinancing, so your loan has a discharge policy.

If you cannot get out of your current loan, and it does not have a discharge policy, review your life insurance coverage. You may want to adjust your policy so that it covers the remaining student debt if needed.

Frequently asked questions

• Will my parents or spouse have to pay taxes on a discharged student loan?
  

  As of 2025, no. Your surviving family members are not liable for taxes on discharged student loan balances.

  Some of the provisions from the Tax Cuts and Jobs Act are set to expire in 2025, which may affect this. Check with a tax professional if you are unsure.

• Do I have to pay my parents’ student loans if they die?
  

  If your parent took out a private student loan on your behalf and they die, there’s a chance that you could be responsible for paying it back. If it was a federal student loan, it would be discharged. If the loans were for your parents’ use, you’re not responsible for them, and they will most likely get discharged.

• Do I have to pay my spouse’s student loans if they die?
  

  If you were a cosigner on your spouse’s loan, there’s a chance that you could be responsible for repaying it if they die. However, it depends on the loan. For federal student loans, the loan will be discharged in most cases. If you were a cosigner for their private student loan, you’d need to contact the lender to see how to get out of paying the loan.