In light of the SARS2 (nee COVID19) pandemic, there is a lot of current anxiety regarding the health of our resident members – in addition to the financial health. What follows is a somewhat macabre summary of some of our benefits with regards to student loans and the protections in place for residents with student loans in the event of death.
UW offers Basic Group Life Insurance for all resident employees – amount of $35,000. At the time of hiring, and thereafter, there were opportunities to sign up for additional Term Group Life Insurance. The group number for these policies is the UW Group number (email us if you need this). You should have received letters in the mail detailing your coverage and beneficiaries that you have elected. Unfortunately, the MetLife website is frequently under maintenance and it is very difficult to call – “due to high call volumes.” Be prepared for this if you are trying to change your beneficiary elections.
With regards to loans, federal student loans are disbanded in the case of the borrowers demise: https://studentaid.gov/manage-loans/forgiveness-cancellation/death. What is needed for this to happen is that proof of death be mailed to the borrower’s loan servicer.
There are, however, some caveats. If you have a co-signer for PLUS loans, co-signers in the past have been taxed on these PLUS loans as income – form 1099-C. However, this also should (hopefully) be a thing of the past based upon the Tax Cuts and Jobs Act of 2017, which protects the family and estate of the deceased borrower.
Unfortunately, private loans and refinanced loans are much more case-by-case and you must refer to the original terms of the loan and plan accordingly.
Similarly, private consumer debt such as auto loans, credit cards, etc., are case by case.
This is a macabre and unfortunate topic, I know; but as this pandemic deepens and more residents are exposed, it behooves us to speak to our families and develop plans, just as we recommend to our patients.
Thank you to Dr. Axel Adams (PGY1, Emergency Medicine) for putting together this information to share