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Student Loan & Deceased Borrower

I co-signed on a student loan, and the primary borrower died recently. Am I responsible for paying this debt?

My daughter, a lawyer aged 31, was killed last month in a car accident in the mountains. She has 3 law loans and one bar study loan through Sallie Mae. She missed her payment on November 7, as we were told that if we sent a copy of her death certificate all loans would be forgiven. Friday we got a bill in the mail informing us of this missed payment and telling us, that, I , as her cosigner, was now responsible for payment of these loans. We did speak to a representative who is mailing us some paperwork to fill out regarding our household income. She worked for a non-profit and was on the 20 year payment plan. I do not know for sure if these are federal or private loans. I hope that this is enough information.

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Bill's Answer
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Updated: Sep 24, 2014

Student Loan Consolidation
Highlights

  • Federal student loans are forgiven when the primary borrower dies.
  • Private loans may not be forgiven if the borrower dies.
  • Sallie Mae may forgive student loans if the primary borrower dies.

My sympathies for your loss. Any time a person dies, it is important to consult with a lawyer experienced in probate, to make sure that all the deceased's assets and debts are dealt with properly.

Federal Student Loans

Federal student loans are discharged when the primary borrower dies. See the Dept of Education Web page Common Disputes Involving Defaulted Student Loans to learn more. This page includes information on what you need to submit to the Dept. of Education to begin the process.

Private Student Loans

Generally speaking, private student loans are not discharged when the primary borrower dies. Contact the lender to see if it offers a forgiveness option for a deceased borrower.

Sallie Mae Student Loans

Sallie Mae appears to discharge student loans. See the Sallie Mae Web page Student loan discharge or cancellation to learn more, the documentation you will be required to provide, and how to start the process.

Learn More About Student Loans

If it turns out that the debts are not discharged, you can learn more about student loans and student loan cancellation, visit the Bills.com Student Loans page, or see the Bills.com resource Top 20 Student Loan Relief Answers.

Survivors' Liability for Decedent's Debts

For additional information regarding the liability survivors may have regarding a decedent's debts, see the Federal Trade Commission documents Paying the Debts of a Deceased Relative: Who Is Responsible? and FTC Issues Final Policy Statement on Collecting Debts of the Deceased.

I hope this information helps you Find. Learn & Save.

Best,

Bill

Bills.com