First of all, how did he manage to get loan in the US? Was he a US permanent resident? Since he went back to Nepal, I am assuming he was a foreign student in this country. If he was a foreign student, I am truly amazed he got the loan from a US school in the first place! Lender goes after the assets of borrower only, even if he was in the US as a US resident. They have no legal access to parents or any other siblings asset, unless they were co-signer for the loan. But of course, I am no lawyer! It is my plain and simple common sense.