For those of you who don’t follow student loan news as closely as I do, here is another dirty little secret about student loans that made the rounds recently, if the co-signor dies, the loan becomes in default. This ruins the credit for the student, even if they have been making payments perfectly on time. The solution is actually pretty easy, and only costs a little bit. I signed on a student loan for my niece and to protect her (shes a great girl) I got a $12 a month student loan policy from LifeAnt. If anything happens to me, the proceeds from the life insurance will just pay off the loan for her. I debated whether or not to make her pay, but ultimately I decided to be the good uncle and just pay myself. Its cheap enough and she doesn’t need any more bills, though I’m sure she can handle it if she had to.