How to Pay Off Student Loans After a Death

Pay Student Loans Death

Losing a child, a spouse or other close family member is a devastating blow. It is understandable if you feel like you can only manage grieving and nothing else.

However, if the person who died had student loans, you need to figure out the situation immediately. Some student loans pass on to heirs after a person’s death and you need to determine where you stand financially.

There are a few steps to follow to effectively pay off a person’s student loans after their death.

1. Track down the details of outstanding loans.

The first step in addressing this issue is to find out exactly what student loans remain unpaid. If you have signed on for any loans as a co-signer, you probably already know the details of these student loans.

From there, go through the deceased’s bills and see what type of payments he or she was making on other student loans.

2. Ask the government to forgive federal student loans.

There are two main types of student loans: loans from the government and loans from private lenders. This includes programs like PLUS Loans and Perkins Loans.

To request loan forgiveness, you need to mail the lender servicing the federal loans a copy of the deceased’s death certificate. At this point, the loans should be forgiven and you won’t have to make any payments.

3. Report a Parent PLUS Loan forgiveness on income taxes.

If you took out a Parent PLUS Loan with your child, this loan will be forgiven after death. However, you will need to report the forgiven amount as income on your upcoming tax return. The government will send you a 1099 for the forgiven amount.

You will owe less than the total outstanding loan but will still need to pay some extra money in taxes.

“The U.S. government forgives

student loans after deaths.”

4. Contact private lenders about the situation.

Private lenders are less forgiving with student loans. While some lenders will forgive private loans after death, most still require payment. They can do this because private lenders almost always require a co-signer for student loans.

If you cosigned the student’s private loans, you are responsible to make all of the payments after death. Make sure the private lender knows you will uphold these payments and make sure not to miss any. This will damage your credit score.

5. Pay what you can out of the deceased’s estate.

When a person dies, everything they own is considered their estate. This includes money in bank accounts, stocks, real estate, cars and other property.

The value of all these assets can be used toward paying off unpaid debts like student loans. Try to use as much of this money as possible to pay off the private student loans so the debts do not transfer over to you.

6. Beware of accelerated payments.

One of the biggest problems with student loans is some can require faster or even immediate payment after the student’s death. Many Americans have been caught completely off guard with a huge bill because a private lender demanded immediate payment.

First, you should always read the fine print of a student loan before cosigning to make sure it does not have these accelerated payment terms.

If you are in this situation, contact the lender and try to figure out some sort of payment plan. If they see you intend to pay off the loan but can’t in a short time, they will likely be more willing to work something out.

Student loans are a problem you need to deal with right away. Hopefully once you deal with this issue, you can get back to mourning your difficult loss.

Photo Source:

Advertiser Disclosure is a free online resource that offers valuable content and comparison services to users. To keep this resource 100% free for users, we receive advertising compensation from the financial products listed on this page. Along with key review factors, this compensation may impact how and where products appear on the page (including, for example, the order in which they appear). does not include listings for all financial products.

Our Editorial Review Policy

Our site is committed to publishing independent, accurate content guided by strict editorial guidelines. Before articles and reviews are published on our site, they undergo a thorough review process performed by a team of independent editors and subject-matter experts to ensure the content’s accuracy, timeliness, and impartiality. Our editorial team is separate and independent of our site’s advertisers, and the opinions they express on our site are their own. To read more about our team members and their editorial backgrounds, please visit our site’s About page.