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Discover What Could Happen if a Student Loan Cosigner Dies?

College tuition money can be hard to come by. For many, scholarships seem out of reach if the grades or sports skills are not there. Grant money can also be reserved for the poorest of the poor. Thi...

College tuition money can be hard to come by. For many, scholarships seem out of reach if the grades or sports skills are not there. Grant money can also be reserved for the poorest of the poor. This leaves many students in the middle, and these students typically take out student loans. A lot of these students require a cosigner on their student loans. Many people wonder what happens when a student loan cosigner dies. This can depend on a few factors such as what type of loan the student has and what status the loan is in.

Federal loans and private loans are the two types of loans available to college students. The Stafford Loan program is low-interest student loans that do not need a credit check. These loans require a cosigner only if the student is considered a dependent student under the age of 24. The student is the one ultimately responsible for repaying these loans and the cosigner is never held liable. If the student loan cosigner dies with a federal Stafford Loan, the student is still responsible to pay. If the student becomes deceased, the loan is forgiven and the estate is not held liable. In some cases, the loan can be forgiven if the student loan cosigner passes away. Check with your individual lender to find out if this is the case for you.

Private loans have a stricter application process and are harder to come by. These are offered by big banks and credit unions as a way to bridge the gap between college tuition and the amounts awarded by federal loans and grants. Sometimes tuition is so high that private loans are needed, but students are young and have not had time to build credit. In these cases, students need to get a cosigner. What happens to these loans if the student loan cosigner dies? These loans are treated much like any other private loan through a bank like a car or home loan. As long as the payments are not in default, nothing will happen to the estate of the deceased if the student loan cosigner dies. If the payments are in default, there is very little chance that the estate will be held liable. They are more likely to pursue the living person on the loan and send them to creditors or pursue other litigation against them, since they were an equal partner on the loan.

Cosigners can be an important part of student loan applications. What to do if a student loan cosigner dies is a common question, but the process is treated just like any other loanHealth Fitness Articles, with the exception of federal loans.

Article Tags: Student Loan Cosigner, Loan Cosigner Dies, Student Loan, Loan Cosigner, Cosigner Dies, Student Loans, Federal Loans, Private Loans, These Loans, Held Liable

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ABOUT THE AUTHOR


Pete Johnson has been in the field of bad credit student loans for a long time and maintains a website about bad credit student loans where you can get answers to the rest of your questions.



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