While only about 7.3% of student loan debt is tied to private loans, according to the Education Data Initiative, it’s equally important to understand how to deal with this financial burden should the need arise. When the borrower dies, the remaining private student loans may be handled in a variety of ways.
“Private loans vary by lender. Some will discharge upon the death of the borrower. Others bill the debt to the deceased estate,” says Betsy Mayotte, the president and founder of The Institute of Student Loan Advisors.