What Happens if My Private Student Loan Cosigner Dies?

By Kassondra Cloos | Published on October 21, 2025

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A cosigner signs a student loan to guarantee to the lender that the debt will be repaid. If you, as the borrower, can’t pay, then it’s up to them to do so. But what happens if your cosigner dies?

The last thing you want to deal with in this situation is a financial headache. Your cosigner is likely someone close to you, and your time should be spent managing grief, not your student loan.

But the unfortunate truth is that sometimes it can be complicated when a cosigner dies. Here are some tips on what to do if you find yourself in this tough situation.

Review your loan documentation carefully

The first thing you should do is review the terms of your loan. Some private student loans require notification of death, but others do not. If you are required to notify the lender that a cosigner has died, you should be able to find this information in the terms and conditions of your loan.

Each lender and loan agreement is different, so there’s no way to know your responsibilities until you read through your documentation. In some cases, you may be able to remain on the loan without a cosigner. In others, though, you may be facing auto-default.

What is an auto-default policy?

Automatic default policies are clauses that some lenders include in their student loan agreements. They stipulate that if a student loan cosigner dies, the loan will go into default and private lenders have the right to pursue legal action to collect the debt. The lender can go after you, the student loan borrower, but may also attempt to collect the debt from the cosigner’s estate.

This can be a nightmare for the borrower. Not only will it affect you financially in a time of grief, but it can also have a devastating impact on your credit score, making it difficult to qualify for everything from credit cards to car loans and even mortgages in the future.

If you aren’t sure what your loan company’s policy is, you should contact them as soon as you’re able to figure out your next steps. You may also find useful resources from the Consumer Financial Protection Bureau, or CFPB, which works to enforce federal financial regulations and keep consumers informed.

If you’re facing auto-default…

If your loan agreement states that your balance is due immediately in the event your cosigner dies, don’t panic. Your lender may be willing to work with you to find a resolution that works for you both. Try a few of the following tactics.

Ask for a cosigner release

If your account is in good standing and you have a history of making on-time payments, you may be able to ask for a cosigner release or death discharge. A cosigner release is when a lender agrees to release a cosigner from the loan, and thus, the cosigner’s obligation to pay it back should you not be able to.

In order to make this happen, the borrower will need to have proven that they can keep their account in good standing by making regular, on-time payments for a certain number of consecutive months. Generally these are not granted after the loan agreement is signed, but the lender may be willing to make an exception in the case of a cosigner dying.

Refinance your loans if your student loan cosigner dies

If your cosigner has passed away and there is an auto-default clause in your promissory note, consider refinancing with another lender before the default triggers. Refinancing involves taking out another loan to pay off your current loan, often for a lower interest rate, which will help you save money over the life of the loan. The process can happen in as little as a few days, so it’s possible to do this either before your lender knows about the death of your cosigner, or before the default kicks in.

Here’s how the refinancing process works:

• Shop for interest rates

Loan refinancing companies will generally give you a ballpark range of the rates you may be offered without requiring a hard credit check. This means they’ll check your credit score without leaving an inquiry on your credit report.

• Determine whether you need another cosigner

The rate-shopping process will help you understand whether you’ll be able to apply to refinance on your own or if you’ll need to find a cosigner in order to qualify. If you’re told you should apply with a cosigner, take a step back from this process and identify someone you can ask for help before moving forward in the application process.

• Choose a lender

Once you’ve shopped for rates, you should compare pros and cons of each lender and the terms of repayment to figure out which company is best for you. For example, Earnest allows borrowers in good standing to request to skip a payment once a year if an unexpected expense comes up. Extras like this may be the differentiator between two companies offering otherwise similar terms.

• Find your 10-day payoff amount

The 10-day payoff amount is the exact amount of principal and interest your loan will require to be paid down to a zero balance within 10 days. You’ll give this number to your new loan company, and that will determine how much you need to borrow to pay the loans off in full.

• Choose your loan terms

Some companies, like Earnest, will let you choose your monthly student loan repayment from a sliding scale that impacts interest rates and the length of your loan. You can choose what works best for your own personal finances.

• Start making payments on your new loan

Once your old loans have been paid off, you can start making payments on your new one to make sure you remain in good standing.

• Refinance again later for better interest rates.

Once you’ve made consistent payments for a year or two, you may be able to refinance again for a lower interest rate—with or without a cosigner. This could save you even more in interest over time.

Consider adding another cosigner to your loan

If the death of a cosigner will trigger an auto-default, you might also try asking the lender if they’re willing to let you add another cosigner to the loan.

Generally speaking, any permanent U.S. resident with an eligible credit score (as determined by the lender) can act as a cosigner. You may start by considering asking other family members or loved ones including the spouse of your cosigner, an older sibling, a parent or grandparent, or aunt or uncle.

Since you’ve already had a cosigner and your loan is presumably in repayment, you’ve ideally already been making regular monthly payments to your student loan lender. So, you may be able to prove your trustworthiness to a prospective cosigner by showing evidence of your work to pay down your loan balance.

Show your prospective cosigner that you’ve been making on-time loan payments. Explain to them what your budget looks like and how you’re approaching your repayment plan. You may also want to do some research about how to refinance your loans once you’ve improved your credit score enough to refinance your loans again on your own without a cosigner. This way, your prospective cosigner can see how you intend for this to be a short-term solution and not a long-term plan as you pay down your student loan debt.

If there’s no auto-default clause…

If you’ve reviewed your loan documentation and there’s no auto-default clause that triggers when your cosigner dies, then nothing about the loan should change. Your payments should stay the same –– and rates, terms, etc. The only thing that will be different is, now, the lender doesn’t have someone to reclaim the debt from in the event you can’t pay it back. But that’s not your problem; it’s theirs. If there’s nothing in the documentation that states your loan will go into auto-default, then you are free to continue paying back the loan in the same way you were when your cosigner was alive.

What happens to a student loan if the borrower dies?

If a student loan borrower dies, on the other hand, what happens to the debt depends entirely on what type of loan it is.

Federal student loans, for example, are discharged once the loan servicer has received a death certificate verifying the death of the borrower. The entire balance of the loan will be canceled. This is true for both Direct loans borrowed by the student and PLUS loans borrowed by the parent. Parent PLUS loans will be discharged in the event of either the death of the parent who borrowed the loan or the death of the student on whose behalf the loan was borrowed.

Private student loans, however, do not have to offer the same kind of protection (although some may offer it anyway). If the primary borrower dies with a cosigner on the policy, it’s possible the cosigner will have to pay back the debt. Some families choose to take out life insurance policies on the primary borrower of an education loan to protect them in the event of an unexpected death.

You should consult your loan agreement or contact your lender directly to ask questions about what happens in the event of the death of the cosigner or primary borrower, so that you have no confusion about your responsibilities.

See how much you could save with Earnest

Earnest treats borrowers like people, not bank accounts. Your refinancing application will be evaluated on more than just your credit score, taking into account your cash flow and savings habits. Earnest also knows life happens—if you have a rough month, you can request to skip a payment once a year and spread the cost over the rest of your loan.

See how much you could save with a student loan refinance from Earnest by trying our rate calculator today. It only takes two minutes to check, and it won’t impact your credit score.