FSA

Federal Benefits

Federal Student Aid (FSA)

Federal student loans discharged in full when the borrower dies

Federal Student Aid, part of the U.S. Department of Education, manages federal student loan programs. When a federal student loan borrower dies, the remaining loan balance is discharged in full. A parent PLUS loan is discharged if either the parent borrower dies or the student on whose behalf the parent borrowed dies. The discharged amount is excluded from federal gross income under 26 U.S.C. 108(f)(5); for discharges after December 31, 2025 the exclusion is claimed by including the taxpayer's Social Security number on the return. The amount may still be income for state tax purposes.

Notifying the FSA when someone dies

A family member reports the death. FSA's page on what to do after a death →

Find the loan holder and report the death to it, not to Federal Student Aid:

•Direct Loans: the assigned loan servicer, listed at studentaid.gov
•FFEL Program loans not owned by the Department: the lender or guaranty agency holding the loan
•Federal Perkins Loans held by the school: that school
•Servicer unknown: call the Federal Student Aid Information Center at 1-800-433-3243

Send the holder an original or certified copy of the death certificate, or an accurate and complete photocopy, scan or fax of one:

•Submit by fax, by upload through the servicer's online account, or by mail
•MOHELA: fax 866-222-7060, or mail to MOHELA, 633 Spirit Drive, Chesterfield, MO 63005
•No death certificate: ask the holder about a county clerk verification, a funeral director or clergy letter, or a newspaper death announcement showing the name and date of birth

Ask the holder to confirm the discharge of the full unpaid balance, including interest. After the discharge it collects nothing from the estate or any endorser, and returns payments received after the eligibility date to the estate.

Send documentation of the student's death to the parent's loan servicer when the student on a parent PLUS loan has died; the parent's obligation is discharged.

Check the state tax treatment of the discharged amount, which is excluded from federal gross income but may be income for state tax purposes.

Required Documents

Death certificate: An original or certified copy; an accurate and complete photocopy, or a scanned or faxed copy, is equally acceptable.
Borrower's name and loan account information
Other reliable documentation of the death: if a death certificate is unavailable. Accepted case by case and including the decedent's name and date of birth, for example a county clerk verification, funeral director or clergy letter, or newspaper death announcement.
Documentation of the student's death: for a parent PLUS discharge based on the student's death

Deadlines1

An FFEL lender's suspension of collection while it requests documentation of the death: within 60 days, extendable by up to another 60 days of the lender receiving reliable information of the death; If documentation is not obtained in that period, the lender resumes collection; the discharge remains available afterward.¹

What FSA pays or provides to survivors3

Federal Student Loan Death Discharge

Loan discharge or protection

The unpaid balance of a federal student loan, including interest, is discharged when the borrower dies. This applies to Direct Loans, FFEL Program loans, and Federal Perkins, NDSL and Defense loans.^{2, 3, 1, 4}

Who qualifies: Estate or family of a deceased federal student loan borrower

Amount: Full remaining loan balance, including interest, discharged

How to apply: Contact the loan holder and submit an original or certified copy of the death certificate, or an accurate and complete photocopy of one of those documents.

Parent PLUS Loan Discharge (Student Death)

Loan discharge or protection

When the student on whose behalf a parent obtained a PLUS loan dies, the parent borrower's obligation is discharged.^{2, 5, 3, 1}

Who qualifies: Parent borrower of a PLUS loan obtained on behalf of a student who died

Amount: Full remaining PLUS loan balance discharged; for a consolidation loan that repaid a PLUS loan, only the portion attributable to that PLUS loan, measured as of the date of the student's death

How to apply: Contact the loan servicer and submit acceptable documentation of the student's death.

Parent PLUS Loan Discharge (Parent Death)

Loan discharge or protection

When the parent borrower of a PLUS loan dies, the obligation of the borrower and any endorser to make further payments is discharged. The student is not responsible for the remaining balance.^{2, 3, 1}

Who qualifies: Estate of a deceased parent PLUS loan borrower

Amount: Full remaining loan balance discharged

How to apply: Contact the loan servicer and submit acceptable documentation of the parent's death.

What happens to each matter1

Loan or loan guarantee

Once the holder has determined the borrower died, it may not collect on the loan from the estate or from any endorser.¹

FFEL PLUS loans could be made to two parents as co-makers; there the death event occurs only when each co-maker has died, so a surviving co-maker parent remains obligated unless that parent independently qualifies for a discharge.¹

The Federal Perkins Loan Extension Act of 2015 barred new Perkins Loans after September 30, 2017 and any disbursement after June 30, 2018, but outstanding Perkins, NDSL and Defense loans are still discharged on the borrower's death.^{6, 4}

What FSA's rules say6

Who reports the death

A family member or other representative reports the death to the loan holder, not to Federal Student Aid. The loan "will be discharged if a family member or other representative provides the loan servicer acceptable documentation of the borrower's or parent's death."²

Payments received after the death

Payments received after the eligibility date are returned to the borrower's estate. An FFEL lender returns payments received after the date of death to the sender.^{3, 1}

Proof of death accepted

The original death certificate is not required: an original or certified copy, an accurate and complete photocopy of either, or a scanned or faxed copy is accepted. The holder may instead verify the death through an authoritative federal or state electronic database approved for use by the Secretary.^{3, 1, 4}

Under exceptional circumstances and case by case, a discharge may be approved on other reliable documentation of the death. For a school-held Perkins Loan the school's chief financial officer makes that call; for an FFEL loan not owned by the Department, the guaranty agency's chief executive officer does.^{3, 4, 1}

Processing and payment

No deadline applies to the family; a discharge can be requested at any time. Direct Loan processing time varies by servicer.²

Tax treatment

A discharge on account of death is excluded from federal gross income under 26 U.S.C. 108(f)(5), which Pub. L. 119-21 rewrote with no expiration date. For discharges after December 31, 2025, the exclusion applies only if the taxpayer's Social Security number is on the return for that year.^{7, 8}

The federal exclusion covers both federal student loans and private education loans. The discharged amount may still be income for state tax purposes.⁷

What the agency does and does not handle

Federal law does not require a private lender to discharge an education loan on the borrower's death, and policies vary by lender; the private lender is contacted directly.²

Other agencies and offices involved4

The borrower's assigned loan servicer: Death reports and discharge for Direct Loans and Department-held Perkins Loans; shown under "My Aid" on StudentAid.gov^{9, 2}
MOHELA: A Direct Loan servicer; takes death documentation by fax, by upload after logging in, or by mail¹⁰
Fax: 1-866-222-7060
Mailing address: MOHELA 633 Spirit Drive Chesterfield, MO 63005
The lender or guaranty agency holding the loan: Death reports and discharge for FFEL Program loans not owned by the Department²
The school that holds the Perkins Loan: Discharge of a Federal Perkins Loan the school holds, through its financial aid or business office^{2, 4}