Federal Student Loans: Discharged at Death
All federal student loans — Direct Loans, Stafford Loans, Perkins Loans, PLUS Loans — are discharged (cancelled) upon the death of the borrower. The balance is eliminated entirely. No one else is responsible for paying it.
What you need to do
- 1.Contact the loan servicer (found on studentaid.gov or on their most recent statement)
- 2.Provide a certified copy of the death certificate
- 3.The servicer will process the discharge — this typically takes 30-90 days
- 4.Any payments made after the date of death should be refunded
Parent PLUS Loans
Parent PLUS Loans are discharged upon the death of either the parent borrower or the student on whose behalf the loan was taken. If the student dies, the parent is no longer responsible for the PLUS Loan balance.
Tax Implications
Under the Tax Cuts and Jobs Act of 2017, federal student loan discharges due to death are not treated as taxable income for discharges occurring between 2018 and 2025. Before this provision, the discharged amount could be treated as taxable income to the estate. Check with a tax professional for the current rules at the time of filing.
Private Student Loans: It Depends
Private student loans are governed by the loan agreement, not federal law. Policies vary by lender.
If there is no cosigner
Many private lenders will discharge the loan upon death. Others may file a claim against the estate. The debt cannot be transferred to family members who did not cosign.
If there is a cosigner
The cosigner is typically responsible for the full remaining balance. Some lenders offer cosigner death discharge policies, but this varies. Check the original loan agreement or contact the lender directly.
Major lenders with death discharge policies: Sallie Mae, Navient, and several others now offer death discharge even for cosigned loans. Always ask — the policy may have changed since the loan was originated.
Step-by-Step: What to Do
- 1
Identify all student loans
Check studentaid.gov for federal loans. Check the deceased's credit report (annualcreditreport.com) for private loans.
- 2
Stop autopay immediately
Cancel automatic payments to prevent the estate from paying debts that will be discharged.
- 3
Contact each loan servicer
Notify them of the death and request the discharge process. Ask what documentation they need.
- 4
Send death certificates
Each servicer will need a certified copy. Request enough copies early (at least 10-15 total for all needs).
- 5
Request refunds
Any payments made after the date of death on federal loans should be refunded to the estate.
- 6
Get everything in writing
Request written confirmation of the discharge. Keep it with your estate records.