What happens to unpaid student loans when you die?
If you die with outstanding federal student loans, it seems like the student loans will die with you. My understanding is based on the following quoted text:
Federal student loans will be discharged upon the borrower's death. The following link has pertinent info on this: studentaid.ed.gov/students/publications/repaying_loans/2003_2004/english/loan-discharge-cancellation.htm For more information about discharge, contact the Direct Loan Servicing Center by calling 1-800-848-0979 if you have a Direct Loan. If you have a FFEL, contact the lender or agency that holds your loan WikiAnswers - If you have outstanding student loans and die is the estate charged for the student loans. wiki.answers.com/Q/If_you_have_outstanding_student_loans_and_die_is_the_estate_charged_for_the_student_loans (accessed May 13, 2010).
So it really looks like if you die while you still have unpaid student loans, then the loans aren't going to be a burden on your family. The unpaid part of the loan just vanishes when a person dies, it seems.