022221StreamLoanDeathDischargesOptions

Author
Federal Student Aid
Subject
Streamlined Loan Death Discharges Options (EA ID: LOANS-21-04)

Federal regulations at 34 CFR 674.61, 682.402, and 685.212 authorize a death discharge to be granted in cases where a loan holder or the Department possess verification of the borrower or student’s death through an authoritative Federal or State electronic database approved for use by the Secretary.

We have analyzed the information in the National Student Loan Data System (NSLDS) and determined that, because the first instance that a death discharge would have been based on reliable information (such as a death certificate), and because reporting quality to NSLDS is sufficient for this purpose, we could create a report identifying other outstanding loans for deceased students or borrowers. This announcement is our designation under the death discharge regulations, of a specific NSLDS report, discussed below, as verification of a borrower or student’s death through an electronic database approved for use by the Secretary that can support the granting of a death discharge without further documentation.

The NSLDS report in question is the Death Status Conflict Report, which contains data showing that a death discharge has been applied to one loan for a student or borrower, but another loan remains outstanding. The specific loans identified in the report should be construed as automatically eligible for a death discharge without further documentation. We encourage FFEL Program loan holders and Perkins Loan schools to use this report to discharge loans and TEACH Grant service obligations due to death and follow normal processes with respect to reporting and claim filing after using this report.

It is important to note that only the loans that appear on the NSLDS Death Status Conflict Report are within the scope of the designation and therefore automatically eligible for discharge. The analysis conducted in the creation of the report uncovered some older, unreliable data in NSLDS that was excluded from the report to prevent instances where ineligible loans are discharged.

We expect that this change will reduce the burden on grieving families while still ensuring the proper procedural safeguards are in place. The Department will be using the NSLDS Death Status Conflict Report for the loans it holds.

Thank you for your support as we implement more effective methods of serving our students while maintaining the integrity of our federal student loan programs.