Do loans transfer to survivors?

[DrSteve]

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I'm a nontrad with what might seem an odd question. If I die before paying off the massive loans I'll be taking on to go to med school, will my wife be responsible for the balance? I expect to be taking out both federal and private loans, and am wondering if I need to also take out an insurance policy that would cover those debts.

 

[GeraldMonroe]

Are you going to medical school in the United States, and are you a U.S. citizen?

If the answer is yes to both questions, you will not need private loans unless you are trying to borrow above the CoA, which is more or less illegal.

If you only have federal loans, then you need not worry. Federal student loans are forgiven if you die or become disabled.

 

[Aznfarmerboi]

I'm a nontrad with what might seem an odd question. If I die before paying off the massive loans I'll be taking on to go to med school, will my wife be responsible for the balance? I expect to be taking out both federal and private loans, and am wondering if I need to also take out an insurance policy that would cover those debts.

No. She will not be responsible. However the estate that you leave her is fair game for your creditors. Loan companies might also contact her asking her to repay your loans. However, she does not have to but can do so for closure or religion purposes.

 

[stargirl50]

Are you going to medical school in the United States, and are you a U.S. citizen?

If the answer is yes to both questions, you will not need private loans unless you are trying to borrow above the CoA, which is more or less illegal.

If you only have federal loans, then you need not worry. Federal student loans are forgiven if you die or become disabled.

I wish this were true. I have borrowed through private loans 2 of my 4 years of med school and have never borrowed the full cost of attendance. Staffords only cover so much.

It's my understanding that your Stafford loans would be forgiven, but the private loans would not; every student at my school has some sort of insurance to cover that situation (it's pretty inexpensive and it just gets tacked onto the bill).

 

[GeraldMonroe]

I wish this were true. I have borrowed through private loans 2 of my 4 years of med school and have never borrowed the full cost of attendance. Staffords only cover so much.

It's my understanding that your Stafford loans would be forgiven, but the private loans would not; every student at my school has some sort of insurance to cover that situation (it's pretty inexpensive and it just gets tacked onto the bill).

Where are you going to medical school? Are you are a U.S. citizen? Grad PLUS loans are a federal student loan you take after you tap out your Staffords for a particular year, or overall. I've recently had to take some out. They have no limit, either annual or lifetime, although the interest rate is 8.5% and the fees are high.

If you're going to medical school in the U.S., living within the CoA, and are a U.S. citizen, I know no reason you would need to take out private loans.

 

[DrSteve]

Thank you for the responses. I was a bit mistaken in my post. I am going to attend a US Allopathic program and I am a US citizen. When I stated "private" loans, I believe I was using the wrong word. What I meant was that I expect to be taking out loans to the full extent of the COA (and no more). I thought that "private" was the right word to indicate the amount that is not subsidized. I take it from a couple of the responses that loans that are not subsidized are not necessarily private.

 

[TMP-SMX]

All federal loans are discharged upon death. Grad plus has no limit besides the cost of attendance.

Federal loans include Perkins up to $5000 (need-based only), Stafford subsidized up to $8500, Stafford unsubsidized up to $32,000, and Grad Plus up to the cost of attendance minus other financial aid.

 

[stargirl50]

Where are you going to medical school? Are you are a U.S. citizen? Grad PLUS loans are a federal student loan you take after you tap out your Staffords for a particular year, or overall. I've recently had to take some out. They have no limit, either annual or lifetime, although the interest rate is 8.5% and the fees are high.

If you're going to medical school in the U.S., living within the CoA, and are a U.S. citizen, I know no reason you would need to take out private loans.

I am at an allo school in the US and am a citizen. I am, however, about to graduate and I think some of the rules may have changed since I started school. I definitely have private loans, but I think you're right-- you can get Grad PLUS loans now up to the cost of attendance.

When I started school the interest rate on private loans was lower (variable at prime +1% depending on credit score). So I went with those instead. But I guess this isn't an issue for people just starting school. Sorry about the confusion.