Are Kids Liable For Their Parents’ Outstanding Student Loans?

Federal student loans can be discharged upon the death of the borrower or student, and the remaining balance is forgiven. This applies to Parent PLUS loans, which are also discharged upon the death of the student on whose behalf the loans were made. The federal government discharges the remaining loan balance as long as the borrower or student dies. If the parent or spouse died with unpaid hospital or doctor bills, the estate is responsible for paying them if it has the money.

A Parent PLUS loan is a federal loan made strictly to the parent; students bear no responsibility for repayment. The federal government discharges Parent PLUS Loans completely if the parent or student dies. A 2018 change in the US tax code allows the surviving parent to submit proof of death after the required proof of death is submitted. The borrower’s family is not responsible for repaying the loans.

If the borrower dies and has a federal student loan, no one will be responsible for their debt. Federal student loans qualify for student loan discharge when the borrower dies, and Parent PLUS loans are discharged upon the death of the student. The surviving parent is still responsible for payment. If the student dies, their parent’s PLUS loan will be discharged.

However, it is important to protect your family or co-signer from student loan burdens if you die.