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Does a parent’s hidden student loan debt pass to the child after death?
The outcome depends on whether the debt was taken out as a Parent PLUS or private parent loan, which are generally the parent’s responsibility even if the student never cosigned.
Americans owe $1.66 trillion in student loans, but some families are caught off guard by unexpected balances tied to parents’ borrowing for a child’s education, including cases that come to light after a parent dies, according to Yahoo Finance.
A key distinction is whether loans were taken out for the student or for the parent. For example, the article describes a scenario where a parent borrowed about $90,000 after previously funding part of a child’s education, raising the question of whether the student is “on the hook” for the unpaid amount.
The piece explains that parent loans can be taken through federal Parent PLUS Loans or private parent loans, and that parents who take out those loans are solely responsible, especially where the child did not agree to the borrowing and never cosigned.
Even when responsibility remains with the parent, the article notes the debt may not simply disappear, because depending on the loan type, lenders may seek repayment through the parent’s estate or assets.