Co-signers, co-owners, and the deceased’s estate are responsible for remaining debts. These obligations must be repaid from existing assets before beneficiaries receive their inheritance.
For example, if someone dies with a mortgage, the estate must continue payments to avoid foreclosure. If heirs can afford the payments, the mortgage servicer might transfer the loan to them. If the home is sold, the proceeds pay off the mortgage lender and other creditors.
Only what’s left will go to heirs. If there’s any good news here, federal student loans get wiped out when you die. Some private student lenders discharge loans at death, too.