Young lady’s mom had taken out a parent plus loan, the Mom passed. Does the loan automatically become the debt of the student? The student is of course now being told to pay it. I thought since the parent took it out, the debt died when she died. Is there any help in this situation?
What happens with parent plus loans if the borrower dies?
A Parent Plus loan in the parent name alone can be forgiven. Your friend should quickly get an original certified copy of the death certificate and provide it to the loan servicer as proof of her passing. Otherwise the loan servicer will take the easy way out and try to collect.
If you, the borrower, die, then your federal student loans will be discharged. If you are a parent PLUS loan borrower, then the loan may be discharged if you die, or if the student on whose behalf you obtained the loan dies.
The loan will be discharged if a family member or other representative provides a certified copy of the death certificate to the school (for a Federal Perkins Loan) or to the loan servicer (for a Direct Loan or FFEL Program loan). For more information, contact your loan servicer. – Source
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