What Happens to a PLUS Loan when Parents Die?

A PLUS loan is a federal student loan offered by the government to the parents of undergraduate and graduate students.  Paying the borrowed funds is their responsibility so if the parent should die, it's important to know what comes next:

Student Loan Cancellation

If the parent, or borrower, of a PLUS loan dies, the loan will be canceled. The dependent should inform the Direct Loan Servicing Center (for Direct PLUS loan), or the lender or agency holding the loan (FFEL PLUS loan) as soon as possible. The lender will provide the student with required form for a loan cancellation or discharge.

Requirements for Loan Cancellation

After the student informs the concerned agencies and completes the required forms, the most important document that the lender will require is an original or certified copy of the death certificate. Generally, the approval and denial of the application will be based on the said documentation receipt of all applicable forms. A notice will be sent to the student right after the application is reviewed and approved. Denial of the request only happens when the submitted death document is a false certification.

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