It can be a really difficult time when a borrower dies. The silver lining is the process to notify of a borrower’s death is pretty straight forward.
The first good thing is anyone can make the phone call and report this death. So if you have a family friend to do it so you don’t have to face it, that can be arranged.
When the reporting party calls, they will be asked for the date of death of the borrower, the name of the funeral home, the county, city and state of death and who should be contacted to receive a death certificate.
The first set of information is used to be able to search for the death in court records. The second part is what is necessary to have discharged by Department of Education.
Once it is initially processed, a Death Forbearance will be placed on the account to keep any more payments for being due for approximately 60 days. This will give time to have you send in the death certificate and for it to be processed.
Once processed, the loan will be discharged. Please remember this discharge is taxable to talk to an accountant about what ramifications this may entail.
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