Can Student Loan Creditors Come After an Estate in Probate?

Student loans may or may not be discharged upon the borrower’s death, depending upon their status from the federal government or a private bank. If the loan was issued from a private lender and the estate is deemed to have enough value to pay it back, the lender may come after funds for that balance. All federal loans are discharged upon the borrower’s death.

As the student loan problem continues to pile up across the country, the debt numbers are becoming so insurmountable that many will likely be unable to pay off the full balances before they die. This brings up a new set of questions about what can happen to those with small estates, but significant balances to resolve. For those working through estates entering probate, this mountain of debt can become a real problem if the rules around those balances aren’t understood.

Federal Student Loans

As The Balance points out, all government-issued student loans are discharged upon the borrower’s death. They are not passed on to anyone in the borrower’s family or the borrower’s estate. The debt is fully forgiven. Someone (typically the executor of the estate) will have to produce proof of death to the loan servicer to have the loans discharged. The discharge applies to Parent PLUS loans (those where a parent is the primary borrower and the funds have specific allocation rules) as well. Additionally, if the student recipient of those loans dies, the loan is discharged.

Private Student Loans

There is much more variance if the loan came from a private lender. Private lenders have no legal obligation to cancel or discharge debt if a borrower dies, meaning that they could come after outstanding balances in probate. It’s important to review the lending agreements of a borrower’s loans to understand what the specific rules of that loan are. For estates with little or no value, the debts will typically remain unpaid, but if the estate does have substantial value, then the lenders may appear in probate to ask for payment.

Additional rules and policies may apply to private loans where a co-signer agreement is in place.


Richard P. Arthur, Attorney at Law has years of experience helping Dayton and Trotwood clients work through the probate process, resolving debts and retaining the estate’s value along the way. To learn more about how his experience can be put to work in your specific situation, call 937-254-3738 to schedule a free consultation.