29 Oct What happens to college loans if someone dies

Q. What happens to college loans when someone dies? We have college loans of about $100,000 from our large family. All the loans are in one spouse’s name. What happens if he dies?
— Borrower’s spouse

A. That depends.

If you have private loans, the loans probably won’t go away after the death.

But generally, federal student loans are dischargeable at death, said Yale Hauptman, an estate planning attorney with Hauptman and Hauptman in Livingston.

That means a student borrower’s loans will not need to be paid back by the student’s estate.

“Most federal student loans do not require a cosigner, although there are some student loans that do if the borrower has a bad credit history,” Hauptman said. “In that case, the cosigner would also be discharged from the debt if the student borrower dies.”

Then there are federal parent college loans – the Parent PLUS loan.

“Parent PLUS loans are federal student loans in which the parent and not the student is the borrower,” Hauptman said. ” If either of parent or student passes away, the debt is also forgiven.”

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