guarantee of a student loan.

by John
(Iowa)

My father co-signed a student loan for a grandson, passed away a couple of years later. This grandson has fallen behind in paying the loan and now we are being contacted for my fathers estate to step in and pay up. He has been deceased for a little over 6 years. The state this is happening in is Iowa

Comments for guarantee of a student loan.

Click here to add your own comments

Oct 14, 2012
guarantee of a student loan.
by: DebtCollection Answers.com

When the co-signer on a student loan dies, whether or not the deceased's estate is responsible for the debt if the student borrower falls behind on it depends on a number of factors, including the type of loan (federal or private) and on the requirements of the loan agreement.

Typically, if the student loan is a federal loan, the obligation of the person who co-signed for the debt is wiped out when that person dies. In other words his or her estate is not responsible for the debt and the borrower -- your father's grandson -- becomes solely responsible for making the loan payments.

Some private student loan agreements however state that the the loan must be paid back in full upon the death of the co-signer by the co-signer's estate. Therefore, if the grandson had this kind of loan, the lender should have filed a claim against your father's estate during the probate process to get repaid from the assets in the estate. However, it sounds from what you tell me that that did not happen and given that your father died 6 years ago, the probate process has probably been over for some time. Therefore, it's unlikely that the lender has the right to collect from the estate, which would make the grandson 100% responsible for his student loan debt.

To be sure that your father's estate has no obligation to pay his grandson's student loan, I recommend that you read the loan agreement and that you consult with an attorney in your area who is familiar with the probate law in your state and how the debts of a deceased person are handled, Ask Estate Lawyers Now.

Click here to add your own comments

Return to Deceased Person's Debt Collection Questions.