Student Debt Inheritance

[Matthew J]

Hi guys,

Quick question I’m struggling to find answer to:

Does a guarantor (in this case spouse) of a student loan inherit the student’s debt (maintenance loans and tuition fees) if the borrower dies?
If so, does the next of kin(in this case a child) of the guarantor inherit the debt if the guarantor dies?

Seems like a member of family has taken out student loans without the guarantor fully understanding there is more to it besides earning a certain amount before having to pay it back.

Thanks guys.

 

[Mark T Jones]

I don't know much about student lians, but I'd say the answer to this will rely heavily on the circumstances in which the guarantee was signed.

In the corporate world, its an absolute requirement that non-related guarantors take legal advice. (Its also recommended that related ones do)

 

[IanSuth]

Are these standard SLC UK debts - in which case NO

Student loan cancellation - if a customer dies

If a customer dies, their student loan can be cancelled.

www.gov.uk

Other student loan debts would depend upon who they are with and the contracts

 

[Matthew J]

Are these standard SLC UK debts - in which case NO

Student loan cancellation - if a customer dies

If a customer dies, their student loan can be cancelled.

www.gov.uk

Other student loan debts would depend upon who they are with and the contracts

Thanks for the link.

I had seen this previously, but not sure if that applies to a debt which has a guarantor..?

For example, if the student cannot pay the debt whilst alive, the guarantor is liable to pay it.

I wonder if the debt has to be paid by the guarantor if the guarantor is still alive and the student ia deceased…? If so, then would this be passed to next of kin?

It’s the guarantor bit that’s hard to decipher and I can’t find anything online about it Maybe I’m over complicating but the debt may not be a student debt, it could be a guarantor’s debt based on a student’s loan..?

 

[DontAsk]

SInce when did student loans need a gurantor?

 

[IanSuth]

If it has a guarantor it is not a Student Loans Company loan debt and in which case ignore that link and look at the contract entered into

 

[Matthew J]

If it has a guarantor it is not a Student Loans Company loan debt and in which case ignore that link and look at the contract entered into

Thanks

I’ll try and find out some more details as if it is a private loan and not from SLC then yes contract would be more specific.

 

[WaveJumper]

Sounds more like this is a bank / finance company type arrangement as already mentioned the devil as always is going to be in the detail, also worth checking if any insurance policy was attached which might payoff the remaining balance

 

[ChrisCallaghan]

I'd agree with what others have said. The SLC don't ask for guarantors - they either grant Student Loans or they don't. It sounds like an independent finance company rather than SLC.

Guarantees can be a funny business where the borrower dies. You'll want to look through the details of the guarantee. If you can't locate the original, contact the lender for a copy.

 

[kulture]

If you don't have a copy of the signed contract and garantor deed, then don't pay or accept any liability until the lender can provide you with proof and a copy of the contracts. Some lenders are not above demanding payment without completed paperwork.

 

[IanSuth]

If you don't have a copy of the signed contract and garantor deed, then don't pay or accept any liability until the lender can provide you with proof and a copy of the contracts. Some lenders are not above demanding payment without completed paperwork.

And from personal experience (last November) even the big boys like to claim things like "you need to pay off the entire debt ASAP from the estate" when the terms clearly state a novated contract in the name of surviving spouse is equally acceptable (that was a VW finance 3yr car deal where my stepfather died and my mum just wanted to carry one paying the contract form the same account even).