Just curious if there are conditions where student loans can be inherited by family members that did not co-sign on the loan?
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1As this straddles both legal and fiscal areas it might be wise to check money.stackexchange.com as well and search for "responsible loan"– Jason AllerCommented Jul 1, 2015 at 21:36
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@Jason Aller thanks, i will look into that as well.– hellyaleCommented Jul 1, 2015 at 21:57
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Family members who do not co-sign loans have not been responsible for those loans in Europe or the Americas since at least the 1600s or 1700s (except in the case of spouses where there were holdouts through the 1800s and even the early 1900s). There was family responsibility for debts in some parts of Asia into the early 1900s at least.– ohwillekeCommented Aug 8, 2017 at 19:57
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2 Answers
I will assume for this question you are referring to a US Department of Education backed loan. In that case, according to the US DoE website:
If you, the borrower, die, then your federal student loans will be discharged. If you are a parent PLUS loan borrower, then the loan may be discharged if you die, or if the student on whose behalf you obtained the loan dies.
The loan will be discharged if a family member or other representative provides a certified copy of the death certificate to the school (for a Federal Perkins Loan) or to the loan servicer (for a Direct Loan or FFEL Program loan). For more information, contact your loan servicer.
If, however, it is a private student loan, it will have to be paid by the estate.
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Does this include cases of suicide? I'd upvote, except i only have 1 rep– hellyaleCommented Jul 1, 2015 at 21:56
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1It appears to. It does not distinguish about how the borrower dies. CYA: I am not a lawyer. If you are seeking legal advice go speak with an attorney.– AndrewCommented Jul 1, 2015 at 22:00
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3Ps if you are considering suicide please call the US National Suicide Prevention Lifeline at 1-800-273-TALK (8255) or 1-800-SUICIDE (1-800-784-2433)– AndrewCommented Jul 1, 2015 at 22:07
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just interested in knowing the answer to the question in terms of the law.– hellyaleCommented Jul 2, 2015 at 13:01
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2@hellyale: Even without enough rep to upvote you, as the asker, can do something perhaps better: Click the checkbox to accept the answer.– feetwet ♦Commented Jul 3, 2015 at 21:03
I am not a lawyer. This depends entirely on jurisdiction and the specific laws therein.
The common law rule of inheritance is that all creditors (which the lender would be) make claims on the estate. After these are paid, any remaining assets are distributed in accordance with the will or applicable law. If there are insufficient assets to satisfy all creditors then the estate is bankrupt and applicable bankruptcy laws kick in; generally secured creditors are paid and unsecured creditors divide up whatever is left in proportion to their debt.
So, no, debt cannot be inherited.
