If you are planning to apply for a private student loan that requires a co-signer, or are considering co-signing such a loan, beware of the following: If the student passes away, the lender can still demand payment from any co-signer. This is different from Federal Student Loans, which are discharged if the student passes away.

In the Fall, the U.S. House of Representatives passed a bill that would require private lenders to disclose this policy to anyone co-signing a student loan, however, the bill has yet to gain any traction in the Senate.

It is recommended that anyone who has co-signed a private student loan take out a 20 year term life insurance policy on the student for the amount of the loan to ensure you will be fully protected if the student were to pass away.