If a borrower dies or suffers a serious, debilitating accident, who is responsible for repaying his or her loan?
The guarantor pays the loan in full after the holder of the loan (lender or servicer) files a claim for payment in the event of a borrower’s total and permanent disability or death. However, please keep the following in mind. A borrower who is subjected to total and permanent disability must provide the lender and the government with a physician’s certification of the disability for review. Please see loan discharge and cancellation forms. More information about Total and Permanent Disability (TPD) Discharge can be found at this Web site. If a borrower dies, the lender must receive a copy of the death certificate or other proof of death acceptable under applicable state law.
