Do parent plus loans go away if the parent dies? This is a question that often plagues the minds of borrowers and their families. Parent PLUS loans are a type of federal student loan designed for parents to help finance their children’s education. However, when a parent passes away, the question arises whether these loans will be discharged or not. In this article, we will delve into the intricacies of parent PLUS loans and what happens to them in the event of the parent’s death.
Parent PLUS loans are federal loans that parents can take out to help pay for their child’s education at a post-secondary institution. These loans are credit-based, and the parent borrower must have a good credit history to qualify. The loan amount can cover the cost of tuition, fees, room and board, and other educational expenses.
When a parent passes away, the fate of the parent PLUS loan depends on several factors. Firstly, it is essential to understand that the death of the parent does not automatically discharge the loan. The loan remains the responsibility of the borrower, unless certain conditions are met.
One of the conditions that can lead to the discharge of a parent PLUS loan is if the borrower can prove that the loan is in default. If the loan is in default, the federal government may discharge the loan upon the parent’s death. However, this is not a guaranteed outcome, as the government has the discretion to determine whether the loan should be discharged.
Another factor to consider is whether the borrower has already received a discharge due to the parent’s death. If the borrower has already received a discharge for the parent’s PLUS loan, then the loan will not be reinstated upon the death of another parent.
In addition, the borrower may be eligible for a discharge if the parent PLUS loan is the only debt the borrower has. In such cases, the federal government may discharge the loan to prevent the borrower from being burdened with an excessive amount of debt.
It is important to note that if the borrower is not eligible for a discharge, the loan will remain in their name. The borrower will then be responsible for repaying the loan, either by themselves or through consolidation with other federal student loans.
Another option for borrowers is to apply for a deferment or forbearance. If the borrower is unable to make payments due to the parent’s death, they may be eligible for a deferment or forbearance, which would temporarily suspend the loan payments. However, this is not a permanent solution, and the borrower will eventually need to resume payments.
In conclusion, the answer to the question “Do parent plus loans go away if the parent dies?” is not straightforward. The fate of the loan depends on various factors, including the borrower’s eligibility for a discharge, the loan’s status, and the borrower’s ability to repay the loan. It is essential for borrowers to consult with a financial advisor or the federal student loan servicer to understand their options and responsibilities in the event of the parent’s death.
