Student loans have been in the news of late. Starting this month, borrowers will be required to make payments on federal student loans for the first time since federal student loan repayment was put on hold at the beginning of the Covid-19 pandemic. Federal student loans can be forgiven, canceled, or discharged for a very limited number of reasons, but one of those reasons is the borrower’s death.
Not all debts are forgiven on death. In general, a person’s assets will be distributed to their heirs or beneficiaries subject to the payment of their debts. In Washington, a two-year statute of limitations from a person’s date of death applies to most debts. This period can be shortened to four months by providing notice to creditors. In probate, RCW 11.40.020 establishes the procedure for a personal representative to notify creditors. If probate is not required for an estate, the non-probate notice to creditors process can be followed by a notice agent as set forth at RCW 11.42.
Federal student loans are an exception to the rule that a claim for a debt incurred during a person’s lifetime can be collected against an estate. A federal student loan will be discharged.
on a borrower’s death if the personal representative of the estate provides the loan servicer with notice of the borrower’s death and any requested documentation.
Private student loans are different. Private loans may be discharged on death, but only if the lender’s terms provide for discharge. Some private loans may not be discharged on the borrower’s death. Under those circumstances, the lender is a creditor subject to the creditor claim process discussed above.
Questions about how to handle debts after someone dies? We’re happy to discuss.
Phone: (206) 784-5305
