Do You Still Have to Pay a Spouse's School Loans if They Die?

If your spouse dies, one of the last things you want to have to think about is repaying thousands of dollars of student loan debt your spouse incurred getting an education. Some types of student loans are discharged when the borrower dies, while other types of loans require that you pay, even though the borrower died.

Federal Student Loans

All student loans issued by, or guaranteed by, the federal government are discharged when the borrower dies. These include Stafford loans, Perkins loans and PLUS loans for graduate students. When your spouse dies, all you need to do is to send a certified copy of his death certificate to the loan servicing company. For recent loans, this is the Department of Education, but with older federal loans, it might be a private lender who serviced the federally-guaranteed loan. The loan servicing company will forgive all remaining debt and not require further payments.

Private Student Loans

In general, private student loans are not discharged at death. However, the policies vary from one lender to another. For example, the Sallie Mae Smart Option Student Loan forgives all debt when the primary borrower dies, as do all Wells Fargo student loans. Contact your spouse's lender to ask about its policies. Even better, find out about discharge upon death before borrowing.

Loan With Co-Signer

If your spouse's loan is not discharged at death, and if your spouse got private student loans with a co-signer, the co-signer is responsible for paying the loan after your spouse's death. Therefore, if you co-signed your spouse's student loans, which might have happened if your credit was better than his at the time when he got the loan, you will have to repay them. If your spouse's parent co-signed the loan, which is a more likely circumstance for undergraduate student loans, then the parent will be responsible for the debt.

Loan Without Co-Signer

If the private student loan is not discharged at death and did not have a co-signer, it will be handled just like any unsecured debt at death. Your spouse's estate, which includes his assets when he died, will be used to pay off all debts before you or other heirs get anything. If your spouse's estate is not large enough to pay the full amount of the loan, then the lender has to discharge the remaining portion. The lender cannot ask you or other family members to repay the debt out of your own personal funds.

References

• Student Loan Borrower Assistance: Disability and Death
• Federal Student Aid: Loan Cancellation & Discharge
• "The Wall Street Journal"; When Student Loans Live On After Death; Mary Pilon; August 2010
• Sallie Mae: Student Loan Discharge or Cancellation
• FastWeb; Wells Fargo Adds Death and Disability Discharges to Private Student Loans; Mark Kantrowitz; December 2010