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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3You'll need to consult the lender for that information. They should have it available, either on their website or via contact form.– NoahCommented Apr 9, 2015 at 23:35
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3Ask 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.– keshlamCommented Apr 10, 2015 at 0:37
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1 Answer
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.
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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.– JoshuaCommented Jun 27, 2016 at 18:11