Consolidating student loans in default
There is no administrative discharge for private student loans if you die.
Private loan debts will be handled the same way as other debts. This estate settlement process (also called probate) varies by state.
The Department of Education administers this program. Borrowers with other federal government loans can consolidate with Direct Loans in order to obtain this benefit.
In order to qualify, you must not be in default and you must have made 120 monthly payments (10 years of payments) on your loans AFTER October 1, 2007.
Some private lenders will use their discretion and agree to discharge loans when a borrower or co-borrower dies.
Yes, if you are eligible for the public service loan forgiveness program.
To find out what type of federal government loan you have, visit the National Student Loan Data System (NSLDS).
You can also click here to help you tell the difference between government and private loans. Ford Direct loans are made directly from the Department of Education to students, without the involvement of a private lender.
You will lose your rights under the federal loan programs once you choose to consolidate with a private lender.
However, it can also lengthen the period of repayment and therefore increase the total amount you will pay in interest over the life of the loan.
Learn more about the pros and cons of consolidation.
There are still many FFEL loans in the system, but as of July 2010, no new FFEL loans are being made. Federal loans, whether through a bank/private lender or the Department of Education, are funded and tightly regulated by the federal government.
Private loans are not subsidized by the government, and therefore are not regulated as closely.