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Life insurance to cover student loans

Licensed Life Insurance Agent/Marketing Manager
April 04, 2020

One very important factor that is often overlooked when it comes to discussing student debt, what would happen to the debt if the person who owed the debt were to pass away before it was paid?

With the average student debt of around $37K, it can take a while to pay all of that back.1 Having a plan in place can protect your family if the unthinkable should happen.

What would happen to my student debt if I died?

If you were to die, your federal student loans will be forgiven as long as the required proof of death is submitted.2

The proof of death is the accepted documentation to have the loan forgiven. This includes the original death certificate, a certified copy of the death certificate, or an accurate and complete photocopy of one of those documents.3

However, this isn't necessarily the case with private student loans. Whether the burden of payment falls to a loved one in this scenario will depend on the private lender's policies.4

If you have a private student loan it would be a good idea to check their policy on this so you can make a plan to protect your loved ones if needed. 

You should also keep in mind that some loan forgiveness programs and taxable as income.5 This could also negatively impact your loved ones. Find out the specifics on your student loan to see if this is the case for you. 

Using Life Insurance to cover student loan debt

As mentioned previously the type of loan you have will dictate whether your loan is forgiven. If you have a private student loan that doesn't offer debt forgiveness you might want to consider getting life insurance to cover that debt.

Same goes for if your loan forgiveness ends up being taxable. This could mean that your loved ones could still owe money on the debt. 

Life insurance to cover your student loan debt is an awesome way to provide for your family and/or estate upon your untimely death. If you have a large balance of federal student loans or private loans, it is wise to have life insurance in place to cover any taxes or any private loans. 

Take the next step

Look at your current student loans and know their policies and what would happen with the debt. It can be pretty affordable if you are young and healthy to get a life insurance policy to cover that debt. Consider looking at the best life insurance companies to provide the coverage you need. By shopping around for the best premium on life insurance you can find the right policy tailored to your specific need. Also, check out our financial guide for students


1., "Students and debt

2. Federal student aid, "Loan forgiveness upon death"

3. Federal student aid, "Loan forgiveness upon death"

4. ABC News, "What happens to student loans when you die?"

5. FinAID, "Taxability of student loan forgiveness"

Written by
Chelsie Ball
Chelsie is fixated on developing innovative ways to present complex ideas and maneuvering people to the information they need. She has worked in digital marketing for the past eight years and has been a licensed life insurance agent since 2010. When she isn’t looking out for the user, you can find her watching Netflix or desperately trying to find a real hobby.