What happenes to your student loans if you die?

[Camul]

In order to attend college for the next three years I had to apply for a student loan, but I was wondering what happens if I die and I still haven't paid it back(UK)? I read up on it and some people say that the debt is wiped, other say that it can go to your parents, and I know that they can't afford to pay it back. As I'm guessing that a lot of you are students or have been, maybe you know the answer.

[Hyydrah]

I hope you aren't planning to kill yourself.  :o

 

This may answer your question though.

 

http://uk.answers.yahoo.com/question/index?qid=20081025032517AAwcXTM

[Camul]

I hope you aren't planning to kill yourself.  :o

 

This may answer your question though.

 

http://uk.answers.yahoo.com/question/index?qid=20081025032517AAwcXTM

 

Thanks, but I there's a mix bag of different answers, and the best answer linked no sources. Also, I forgot to mention that my mother had to fill in some of her information for the loan, if that will have any effect on it.

[Joshua]

They way you've asked this and the way you linked it to yourself makes it sound like you're planning on killing yourself, either that's a mistake or you need some help.

[whatthe_fuzz]

well dont die!

 

 

 

 

 

 

 

`

[SMURG]

Well there are always the possibilities that they either A] have some terminal illness, or B] thought about it one day and now just want an answer out of sheer curiosity. I don't know, but I would think the debt would be wiped given how the rest of the system appears to function.

Everyone's parents have to fill out information on the application; it's part of means-testing. The less your parents earn, the more money you get (because it is assumed that richer parents will pay for their kids, despite this not necessarily being the case). It would seem stupid to me to have the loan default back to the parents given that poorer people need to borrow more. Generally the UK's systems are good enough to see the obvious problem there.

[Guest]

They way you've asked this and the way you linked it to yourself makes it sound like you're planning on killing yourself, either that's a mistake or you need some help.

If he does, I am pretty sure he reached the last checkpoint, he will just respawn there!

 

 

But seriously, don't do it. -_-

[R4STABAN]

In order to attend college for the next three years I had to apply for a student loan, but I was wondering what happens if I die and I still haven't paid it back(UK)? I read up on it and some people say that the debt is wiped, other say that it can go to your parents, and I know that they can't afford to pay it back. As I'm guessing that a lot of you are students or have been, maybe you know the answer.

 

You will probably never pay back the entirety of the loan. It's not like a bank loan.

 

99.9% sure it will not pass on to your parents. You will pay a fixed 9% each month if you earn over 21k a year and after 30 years the debt is wiped.

 

Example:

 

If you earn £25,000 a year, you will pay just £30 a month, the equivalent of an average phone contract. £40,000 and you will pay back £142 a month. The interest is astronomical iirc, so basically you'll be making these 9% payments for 30 years as long as you are earning more than 21k a year.

 

edit: I believe this doc is still valid http://www.direct.gov.uk/prod_consum_dg/groups/dg_digitalassets/@dg/@en/documents/digitalasset/dg_194538.pdf

 

double edit: this is the updated one, if you die it gets wiped http://www.sfengland.slc.co.uk/media/561740/sfe_sltc_1314_d.pdf

[Camul]

I'm not planning to kill myself, I'm just curious in case something does happen to me in the future.

[arodrake]

It gets passed onto your parents.. You can get insurance (e.g. endsleigh) from some companies which cover that.

[prolemur]

well dont die!

 

 

 

 

 

 

 

`

BAD GRAVE ACCENT!

[Camul]

Well there are always the possibilities that they either A] have some terminal illness, or B] thought about it one day and now just want an answer out of sheer curiosity. I don't know, but I would think the debt would be wiped given how the rest of the system appears to function.

Everyone's parents have to fill out information on the application; it's part of means-testing. The less your parents earn, the more money you get (because it is assumed that richer parents will pay for their kids, despite this not necessarily being the case). It would seem stupid to me to have the loan default back to the parents given that poorer people need to borrow more. Generally the UK's systems are good enough to see the obvious problem there.

 

You will probably never pay back the entirety of the loan. It's not like a bank loan.

 

99.9% sure it will not pass on to your parents. You will pay a fixed 9% each month if you earn over 21k a year and after 30 years the debt is wiped.

 

Example:

 

If you earn £25,000 a year, you will pay just £30 a month, the equivalent of an average phone contract. £40,000 and you will pay back £142 a month. The interest is astronomical iirc, so basically you'll be making these 9% payments for 30 years as long as you are earning more than 21k a year.

 

Thanks.

 

It gets passed onto your parents.. You can get insurance (e.g. endsleigh) from some companies which cover that.

 

I looked on their website and it didn't say anything about student loans. I didn't find anything relevant by searching for student loan insurance either.

[Puppet]

I'm not planning to kill myself, I'm just curious in case something does happen to me in the future.

 

Best not to think about those things really. If your mother is a guarantor on the loan she may have to repay it, but I wouldn't worry too much about it as they are usually fairly long term/low interest so I doubt the creditor would put huge amounts of pressure on her.

 

Here is what looks like some credible information:

 

http://moneyfacts.co.uk/guides/debt/who-pays-a-loved-ones-debts-if-they-die/

[Camul]

double edit: this is the updated one, if you die it gets wiped http://www.sfengland.slc.co.uk/media/561740/sfe_sltc_1314_d.pdf

 

Thanks for the link.

[arodrake]

I looked on their website and it didn't say anything about student loans. I didn't find anything relevant by searching for student loan insurance either.

I just double checked and it seems it is wiped off (See http://www.slc.co.uk/services/loan-repayment/loan-cancellation.aspx)

SLC (Student loan company) is the old name for student england finance.

You can always ring them to be 100% sure. Your student loan is not a normal bank loan.

[TygerStrype]

I'm not planning to kill myself, I'm just curious in case something does happen to me in the future.

yeah, like getting married... that's certain death!!

Course depending on who you get your loans through, it's quite possible 'someone' might dig up your body and sell it for parts.  

 

Just messing with ya Camul.  If you default on your student loan, even due to death, your loan will probably be picked up by some credit collector who will bug your parents to pay if off.  Unless you have an estate, when you pass - creditors write off the loan as a loss.  

 

Best of luck to you in your college studies!

[SMURG]

iirc, in the UK if you reach a certain age (around 30-40) without paying off the entirety of your student loan, the remainder is wiped anyway. I guess it's designed to ensure that someone who manages to get a job earning 21k (the amount you have to earn before you start paying it back at all) but then never gets promoted from that position is not stuck paying back their student loan for the rest of their life. Chances are that you'll live to see the age of 40, so I wouldn't worry about it too much