Why Inheriting Student Debt Is More Complicated Than You Think

The collective amount of student loan debt owed among Americans tops $1.8 trillion as of the end of 2025, as per Federal Reserve data, beating motor vehicle loans at $1.5 trillion. It's easy to see how this happened, of course, and it's been in the making long before the Trump administration's student loan changes. The cost of higher education has increased steadily over the years, surpassing inflation rates and making loans necessary for millions of Americans to afford their degrees. But what about those who weren't expecting to owe anything at all? Inheriting student loan debt after a loved one passes is a possibility depending on the circumstances, and it's far more complicated than it may seem.

If not paid off quickly, student loans can linger on for decades and are one of the types of loans that can keep you in debt, with interest rates resulting in the borrower paying back far more than their initial college costs. If the borrower dies before the final payoff though, there are a few different things that can happen. Although it is indeed possible for lingering student loans to be forgiven or otherwise die off with the borrower, the other scenarios result in someone inheriting the remaining balance either directly or indirectly. If you find yourself in this position, what you do next depends on the circumstances that led you here.

The two most important factors to consider when it comes to inheriting student loan debt are whether the loans are federal or private and whether or not you cosigned onto one of these loans. Federal student loans can be discharged upon the borrower's death, and this includes Parent Plus loans. In the latter, the loans can be discharged if either the parent or the student for whom the loan was for dies. But it's private student loans that are trickier. If the primary borrower dies, the responsibility will fall on the cosigner, if one exists. Making matters even more complicated, the loan may be automatically considered to be in default due to the primary borrower's death, regardless of whether payments were made on time. Naturally, this can have a negative impact on your credit score if you're the living cosigner.

Even if you're not a cosigner for a loved one's private loan, don't think you're out of the woods just yet. While some private lenders may discharge the balance if the borrower dies, others reserve the legal right to continue seeking payment. In these cases, the balance may come out of the deceased's estate, depleting funds you otherwise expect to inherit.

If you're a student who isn't paying for your own tuition (or didn't pay, if you've already graduated), make sure you know exactly who is and what kind of loans may be in place, as well as if you're listed as a cosigner. If you're a borrower and have a cosigner whom you don't want to be responsible for the balance if something should happen to you, look into getting them taken off the loan. You can do this by filing an appeal (depending on the type of loan you have) or by refinancing. Likewise, if you're a cosigner who wants to be taken off a loan, now's the time to talk with your fellow cosigner about just that. Be aware, however, that both cosigner release and refinancing require proof of stable income and good credit history for the person staying as the sole payer.

Even if the loans are entirely federal, they will only be discharged when proof of the borrower's death is provided (i.e., a death certificate is submitted). Otherwise, the payment invoices are likely to keep coming, and the estate may wind up in collections. The point is, inheriting student loan debt can be a complicated matter indeed, but it isn't a big mystery and never comes out of nowhere. That's why it's so important to know what your exact circumstances are and understand what really happens to all kinds of debt after you pass on.