What happens to my Government Student Loan (HELP debt) when I die?

If you’ve spent years studying for a university degree, you’ve likely been left with a large Higher Education Loan Program (HELP) loan to repay to the Federal Government. In some cases, HELP loans can run into the six figures.

Many of the assumptions people have of HELP loan repayments after death are incorrect.

On numerous occasions, I have had Executors dealing with the death of a family member, call me concerned that the Federal Government (or one of its agencies) will pursue the Estate for the HELP debt. In some instances, the deceased’s HELP debt has been more than the assets of the Estate.

What happens to our HELP loans when we die? Does our Estate have to repay the HELP loan in full to the government?

The good news is, pursuant to Higher Education Support Act 2003, our HELP loan is wiped on our death. The only catch is, any repayments of our HELP loan that are due at the time of our death, are still owed to the Federal Government. 

So, what does this mean for Estate Planning? Quite often, I see potential Will makers presume it is not worth making a Will due to their false belief their large HELP loan will have to be repaid to the government after their death. If this were to occur, their Estate will be left insolvent (bankrupt) or a large portion of their Estate’s assets will be gone to repaying their HELP loan, leaving little left to distribute (and therefore, little need for a Will.)

Now you know that your HELP debt won’t need to be repaid if you die, it’s worth obtaining a properly drafted Will to make sure your assets are distributed in the way you wish.

Written and edited by Mark Murnane

DISCLAIMER: This article is provided for general information purposes only. It does not constitute specific legal advice or opinion. Although our aim is to provide you with as accurate information as possible, you should not act or rely upon the information in this article without seeking the advice of an experienced lawyer who specialises in the particular area of law relevant to your inquiry. Please do not to hesitate to contact Murnane Legal to make further inquiries or to make an appointment to discuss the specifics of your situation.