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A family member has cosigned a private student loan for a foreign student. If she dies prior to the holder of the loan, is her estate responsible for repaying the loan?

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    You'll need to consult the lender for that information. They should have it available, either on their website or via contact form. – Noah Apr 9 '15 at 23:35
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    Ask the bank, but I would assume the answer is that if you: have signed a contract making you responsible for paying off a loan, that debt is as billable to the estate as any other. The only thing that gets your family member off the hook is if the student pays off; the loan. That's what "guarantor" means, you are guaranteeing that the debt will be paid, period. – keshlam Apr 10 '15 at 0:37
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Although default usually occurs when a borrower consistently fails to pay her bill, it could also happen if the co-signer dies before the repayment is fulfilled.

The problem with having a co-signer for private student loans is that some lenders have a policy that puts borrowers in default after a co-signer dies -- even if the borrower is up-to-date on payments. Defaulting on a student loan can negatively impact a consumer's ability to take out further loans, buy a house, and could even injure a consumer's reputation.

The CFPB suggests that lenders should allow borrowers to find a new co-signer if the original co-signer dies or allow them to refinance the loan.

student loan co-signer death

  • That's when you sue the credit reporting business because that particular default says nothing about whether or not the debtor is responsible at handling of money or not. – Joshua Jun 27 '16 at 18:11

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