What happens to the balance of student loans when the borrower dies?

Do they go after the estate as a preferred creditor?

Thanks.

I believe it depends on the cancellation provisions of each type of student loan, but in general they are forgiven upon death of the borrower. The only exception I know of is for loans that have been consolidated with a spouse's... that is still due.

Federally Guaranteed Student Loans are forgiven upon death of the borrower.


fla-tan

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The regulation concerning spousal loans has been changed. In a spousal consolidation loan, the deceased spouse's loans are now forgiven. That is also true for disability as well.


fla-tan

Really? I wasn't aware of that. Thanks for the heads-up!

*laughs to self* you aren't planning on dying anytime soon are ya'?