In some circumstances, you can get rid of your student loans altogether through loan cancellation, which is also called a "student loan discharge" or "student loan forgiveness." In order to cancel your loans, you must meet one of the conditions that allow you to do so. For example, federal student loans can be canceled when a borrower dies. If a borrower has private loans and dies, though, the debt might not be eligible for cancellation. Read on to learn more.
If you’re eligible for student loan cancellation, you might be able to:
To learn more about cancellation and different ways to deal with student loans if you're having trouble making the payments, see Student Loans: Cancellation, Deferment, and Forbearance.
Federal student loans can normally be discharged when a student—or, in some cases, a parent—dies.
A student’s death wipes out outstanding amounts owed on federal student loans. Federal student loans—like Direct Loans, FFEL program loans, and Perkins Loans—can be cancelled if the student dies.
A parent’s death can wipe out a PLUS loan. With a parent PLUS loan, the loan may be discharged if the borrower (the parent) or the student dies. But if both parents signed for a PLUS loan, the death of one does not wipe out the remaining debt.
Death doesn’t necessarily wipe out consolidated loans. If spouses have consolidated their federal student loans together, one spouse's death wipes out only that spouse's portion. (In the past, spouses could consolidate their federal student loans. Now, though, married couples aren’t allowed to combine their individual student loans into in a single, shared Direct Consolidation Loan.)
In order to get this kind of discharge, you must provide proof of death to the school (Perkins Loans) or to the loan servicer (Direct Loans or FFEL program loans).
What’s a loan servicer? A "loan servicer" is the company that handles the loan account. A servicer collects the payments and handles all other aspects of managing the loan. (To find out which company services your federal student loans, go to the National Student Loan Data System, click on "Financial Aid Review," and log in. After you log in, you'll get a summary of your loan information. Click on each account to get the servicer's contact information.)
How do I show proof of death? Acceptable forms of documentation to prove death usually include:
Generally, if you have questions about what documents you need to show to cancel a federal student loan, call the servicer. Though, if you have questions about Perkins Loan cancellation, you may contact the school or the loan servicer.
Under the 2017 Republican tax reform law, if a student loan borrower dies, the forgiven amount is excluded from taxable income. (Prior to this law, the forgiven amount counted as taxable income.) The exclusion is applicable after December 31, 2017, but won't apply to discharges after December 31, 2025. (Learn more about How the Republican Tax Plan Affects Student Loan Borrowers.)
Private lenders sometimes offer forgiveness options if a borrower dies. To find out if you can cancel a private student loan due to the borrower's death, contact the servicer.
To find additional information about student loan cancellations, go to the U.S. department of Education’s Federal Student Aid website.