What happens to student loans when you die? 3 smart strategies.

Stanley Tate smiling.

Stanley tate

Student Loan Lawyer

$400M+ student loans managed

listen to this post

Federal student debt is discharged when you die. Private student debt is a little more complicated, as different loan servicers have different procedures for student loans after death.

Few things are scarier than looking at your student loan balance and knowing you'll never pay your college debt before you die. You don't want to die and leave your spouse or children stuck having to pay your student loan debt.

Thankfully, most Americans will see their student loans forgiven via a discharge due to death. Here's what you need to know about your student loan debt and death.

Disclaimer: I am a student loan lawyer, but this post contains general information and should not be taken as legal advice. If you want legal advice that pertains to your specific situation, you should schedule a free consultation with me. Also, I recommend some products with affiliate links in this post, but my opinion has not been affected. I’ve seen these products work during my years of experience as a student loan lawyer. I started this business to help a friend, and I’ll treat you with the same respect.

What happens to federal student loans when you die?

Your entire federal student loan debt will be forgiven when you die. Unlike a mortgage or car loan, the U.S. Department of Education forgives federal student loan debt at the borrower's death by issuing a “discharge due to death.” This discharge is not automatic, though. A family member must send in an official proof of death.

That forgiveness covers all federal student loan types:

  • Direct Loans
  • Direct Consolidation Loans
  • Direct PLUS Loans (Parent loans)
  • Federal Perkins Loans
  • Federal Family Education Loans (FFEL)
  • Stafford Loans

Parent Plus loans are discharged both when the parent dies or when the student dies.

Although your federal student debt doesn't go away after 7 years, your spouse or children will not be responsible for your loans when you die.

This loan cancellation at death is why I rarely advise student loan borrowers to refinance their federal student loans with a private lender like SoFi.

You can find out what type of loans you have by visiting the Federal Student Aid website and checking your credit report. The FSA website will show you all of your federal student loans. Any student loan listed on your credit report that's not listed on the FSA website is likely a private student loan.

What happens to private student loans when you die?

Your lender's policies will determine what happens to your private student loans when you die. For instance, Sallie Mae will discharge student loans if the borrower dies. But other lender policies may keep collecting from the cosigner if the primary borrower dies.

You can find your lender's policies concerning a loan discharge by reviewing the promissory note for the loan terms.

In my experience, here's what happens to private student loans when a borrower dies:

  1. The loans will be placed into automatic default
  2. The entire loan balance will become due
  3. The private lender will want to collect on its investment (the loan)

Unfortunately, after the death of the borrower, the private lender may still try and collect the entire balance from the deceased borrower's estate (probate).

Can you inherit student loan debt?

You cannot inherit student loan debt. When your parent dies, their student loan debt will not be transferred to you. Instead, their federal student loan debt will be discharged. However, some private lenders may try to recover their investment after a borrower’s death.

What happens to my Navient loan if I die? Private student loans through Navient aren't automatically forgiven when you die. If Navient holds your federal student loans, then those federal loans will be forgiven.

If you have private student loans with Navient, your debt may go away, but your cosigner will still be responsible for the remaining loan payments. This unfortunate circumstance is another reason why you should know your rights before you cosign a loan.

How to get a "death discharge" for federal student loan debt

The federal government makes it easy to get the deceased borrower's remaining debt forgiven. All you need is proof of death.

To get federal student loan forgiveness due to death, a surviving spouse or family member must send proof of death to each of the deceased’s student loan servicers (the companies that manage loans and repayment).

Proof of death could be any one of the following 3 examples:

  • the original death certificate
  • a certified copy of the death certificate
  • an accurate and complete photocopy of the death certificate

3 options for cosigners

Here are 3 options to protect your cosigner from being stuck with your student loan debt:

  1. Cosigner release: Each lender has its own criteria you need to meet before they grant a cosigner release. Typically, the primary borrower needs to make several consecutive on-time payments for the total amount and show that they have the income to afford the payments on their own. Only then might a lender grant a cosigner release.
  2. Student loan refinancing: If your lender doesn't offer a cosigner release, refinancing your private loans with a new lender can provide a clear path towards a cosigner release. Note: You'll need a blemish-free credit report to get a great interest rate without a cosigner. If you’re interested in a refinance loan, look for high-quality and reliable lenders like CommonBond, SoFi, or LendKey.
  3. Get life insurance: If you don't want your loved ones to be stuck with your private student loans, get a term life insurance policy or some other type of insurance specifically to repay your remaining debt. The beneficiary will get money to pay back your student loan creditors.

Does student loan debt transfer to my spouse after death?

No, neither federal student loan debt nor private student loan debt automatically transfers to your spouse when you die.

Federal student loan debt goes away when the borrower dies.

On the other hand, private student loans typically check to see if the deceased borrower has an estate with assets. If there are assets, the private lender will first try to collect from the estate to repay the student debt.

After that, if a balance remains, the lender will turn to the cosigner to keep making the monthly payments.

If there is no cosigner, the lender may turn to your spouse, but only if two things are true.

First, the spouse must live in a community property state:

  • Alaska (optional community property)
  • Arizona
  • California
  • Idaho
  • Louisiana
  • Nevada
  • New Mexico
  • Texas
  • Washington
  • Wisconsin

Second, the borrower must have taken out the loans during the marriage. Your spouse usually isn't liable for student loans you borrowed before you married.

What happens to student loans when you die and are married? When you die and are married, the type of loan you borrowed determines what happens to your student loans. Federal student loan debt goes away when you die. Any private student loans you borrowed may seek money from your estate or go after your spouse, especially if they cosigned your loans.

Is my spouse responsible for my student loans if I die? Usually, your spouse isn't responsible for your students when you die. Federal student loan debt goes away when the borrower dies. Private student loans can, however, seek payment from your estate. If you cosigned or borrowed a private loan, consider sheltering your assets in a trust or getting an insurance policy beforehand to help pay for the loans after death.

Recent changes to tax laws

Before 2017, student loans discharged due to death or total and permanent disability were subject to income taxes. As a result, your spouse or co-signer could face a huge tax bill even though the debt itself was wiped out.

That changed when Congress passed the Tax Cuts and Job Act. Signed into law by President Donald Trump in 2017, this act made student loan discharge due to death non-taxable. In other words, the IRS could no longer treat student loans discharged due to death or disability as taxable income.

If that weren’t enough, in March 2021, President Joe Biden signed into law the American Rescue Plan Act of 2021, which made all forms of student loan forgiveness tax-free — at least through 2025.

FAQs on death and student loans

  • What happens when you die with student loans? Your federal student loans are discharged when you die. Private student loans may be discharged, but some lenders may try to collect the debt from the deceased’s estate.
  • Is a spouse responsible for student loans after death? No, a spouse is not automatically responsible for student loans after a borrower’s death. Federal student loans are discharged after death, but private lenders may try to collect from the borrower’s estate. The spouse is more likely to take on private debt if they cosigned the borrower’s loans.
  • Do student loans go to parents if you die? No, student loans do not go to parents if you die. Parent PLUS loans are discharged if either the parent who borrowed the loan dies or if the student dies.
  • What happens to the family if the person who died had student loans? If a person who dies had student loans, the family is not responsible for federal student loans. The family may have to deal with private student loan lenders trying to collect the debt from the deceased’s estate.
  • What student loans are forgiven at death? All federal student loans are forgiven after death. Private student loans may be discharged upon death, depending on the lender.
  • What happens to student loans if you become disabled? Federal student loans can be discharged if you become disabled. Provide proof of disability from the VA, SSA, or a physician, and the government will likely discharge your student debt. There is a monitoring period of 3 years, during which the government ensures your income does not rise above a specific poverty guideline.

Dealing with death and debt? Let’s talk.

If you need help with discharge due to death, schedule a free 10-minute call with me. I’m a student loan attorney with years of experience helping folks like you.

Check out my email newsletter, too. I’ll drop helpful tips and expert advice in your inbox while you navigate student loan debt.

Stop Stressing.
Get expert help
Stanley Tate outside in snow.
Hey, I’m Tate.

I'm a student loan lawyer that helps people like you with their federal and private student loans wherever they live.

Read a bit about me & how I got started with student loans.

get expert advice