What happens to student loan debt if the student dies?

Paying for College
1

<p>This is a hypothetical question. We just got a life insurance application in the mail for our son, and it says that the proceeds can be used to pay off student loans.</p>

<p>Suppose a 20 yo student has a loan debt of $10,000 (in his name alone through Stafford Loans) after 2 years of college, and then dies in an accident. Also suppose that this student has no other assets. What happens to this debt? I was under the impression that the debt would be canceled. Am I incorrect?</p>

<p>TIA,
mom6350</p>

2

<p>Federal student loan debt is canceled in the event of the students death.</p>

<p>from <a href=“http://studentaid.ed.gov/PORTALSWebApp/students/english/discharges.jsp[/url]”>http://studentaid.ed.gov/PORTALSWebApp/students/english/discharges.jsp&lt;/a&gt;&lt;/p&gt;

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3

<p>ahhh…another case of insurance being sold for something you don’t need.</p>

4

<p>However, if you co-sign on a private education loan for your student and he dies; the company will come looking to you. So I wouldn’t call it dirty pool by the insurance company.</p>

5

<p>My dad is looking into getting a life insurance policy for me because they cosigned on my private student loans and if I kicked it they’d owe $48,000 that they were supposed to be released from after I made 24 consecutive payments. My stafford loans will be forgiven in the event of my death, it says that in the paperwork you are supposed to read before you sign.</p>

6

<p>Thanks everyone!</p>

<p>mom6350</p>