Parent PLUS loan balances won't transfer to other family members if the parent passes away while still owing money. If a parent who borrows for college with a Parent PLUS loan dies, any remaining loan balances owed will be discharged. The same is true if the student passes away during the repayment period, per the United States Department of Education.

Understanding Parent PLUS Loans

Parent PLUS loans are federal student loans that are taken out by parents (biological or adoptive) instead of by the student. These student loans come with higher loan limits than other types of federal student loans, but they also have higher 澳洲幸运5官方开奖结果体彩网:interest rates.

Parent PLUS loans are for parents of students who are pursuing higher education, so they have different requirements, interest rates, and repayment options. For example, these loans have higher borrowing limits than most other federal student loans. In fact, parents can borrow up to the 澳洲幸运5官方开奖结果体彩网:cost of attendance (COA) for the school the child 🀅attends, minus any other financial assistance received.

These loans also have higher interest rates than other federal student loans, and parent borrowers need to pass a 澳洲幸运5官方开奖结果体彩网:credit check to qualify. Because these loans tend to be more costly and less flexible than ♓federal student loans geared toward student borrowers, they’re primarily meant for filling in fundin𒐪g gaps after students have exhausted all other forms of aid.

Forgiveness for Parent PLUS loans is a complicated process, but 澳洲幸运5官方开奖结果体彩网:some forgiveness options a𒆙re avail✤able.

Eligibility for Parent PLUS Loan Forgivenesꦡs Upon Death

Parent PLUS loans can qualify for 澳洲幸运5官方开奖结果体彩网:student loan forgiveness due to death in two separate scenarios:

• Death of the parent borrower
• Death of the student

Families who need to apply for 澳洲幸运5官方开奖结果体彩网:student loan discharge due to death can do so by contacting the loan servicer in charge of the loans and inquiring about next steps. Typically, they’ll need to provi൲de documentation of the borrower or parent's death, which can include an original death certificate, a certified copy of a death certificate, or a complete photocopy of either document.

Tax Implications of Parent PLUS Loan Discharge 

The tax implications of student loan discharge due to death are somewhat ambiguous at the moment, at least until after 2025. Essentially, the 澳洲幸运5官方开奖结果体彩网:Tax Cuts and Jobs Act made it so student loan debt forgiven through discharge due to death or permanent disability doesn’t count toward gross income through the end of that year.

The Bottom Line

Federal student loans are forgiven if the student passes away, and this is just as true for parents 🥃who borrow for college with Parent PLUS loans. For the most part, qualifying for this discharge only requires families to submit acceptable proof of death.

This type of discharge is also free of major tax consequences through the end of 2025, thanks to the Tax Cuts and Jobs Act. However, this piece of legislation is seಌt to expire 🔴at the end of that year, so it’s uncertain how discharges will be treated for tax purposes thereafter.