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How to Balance Marriage and Student Loans

Getting married has a lot of wonderful perks—emotional support, family, and even tax incentives. But what do you do about student loans? Here’s how to get your affairs in order, and know what you’re getting into, before you say “I do.”
Wedding photo of a couple in a park

There are so many ways that marriage can be financially beneficial. Combining bills, household expenses, and even mortgage payments can help you and your partner find financial stability quickly and easily. On top of this, there are often other financial perks for married couples, such as tax incentives, lower car insurance, and even gym memberships that will cut you a break if you’re hitched.

Student loans, however, can be an altogether different affair. Here’s everything you need to know about marriage and student loans, so that your debt doesn’t negatively impact your marriage before it’s even got its start.

Communicate, and seek help

First things first, be sure that you and your spouse communicate about your student loan debt and finances. Some issues to address include:

  • How much total loan debt do you have?
  • What types of payment plans are you utilizing?
  • When do you plan on having your loans paid off or forgiven?
  • Will you both be paying down the debt together or separately?

Having these conversations early—preferably before you tie the knot—will help you avoid nasty arguments about money down the line. Be clear about how you’re going to share the load, and make sure you have a plan for paying down debt. If the task of taking this level of budgeting on is too daunting, consider talking to a financial consultant or accountant. While it might seem counterintuitive to pay someone to figure out your debts, the knowledge you’ll gain from speaking to an expert will pay for itself in the long run.

Who is ultimately responsible?

It should be noted that if you took out your loans before you were married, then the debt is your sole responsibility. However, if you take out student loans AFTER you are married, multiple factors come into play, including state laws, if your spouse was a co-signer, etc.

If your spouse does co-sign your loan, they are responsible for your debt if you default on payments. In some states, your spouse doesn’t even need to co-sign to be liable for your loans. If you’re married and take out a student loan in a community property state, your spouse is held responsible for any loans. This means that if your loan is in default, and your wages cannot be garnished, your spouse will be made to pay. (Community property states are: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.)

What to know about repayment plans

It’s no secret that student loan debt is a national crisis. Recent studies have shown that nearly 40% of borrowers are either behind on their payments, or not making them at all. This crisis, which has gripped the education system for years, caused a massive overhaul on the part of several institutions, including the Department of Education, when it comes to how loans can be repaid, particularly in times of economic hardship. Now, more than ever, it’s much easier to find a repayment plan that works for you and your needs. Whether you’re married or single, it behooves you to do your homework when it comes to the following income-driven payment plans: Income-Based Repayment, Pay As You Earn, and Income-Contingent Repayment. The gist of these payment options is that they’re all based on your income and can significantly reduce the amount you pay each month, which is particularly helpful if, say, you’re in an entry-level position or you’re working part time for a while.

Death and taxes

Now, here’s the catch: If you’re married and choose to file your taxes jointly, the income-specific payment plans mentioned will take both your and your spouse’s incomes into account. If, however, you are married and choose to file separately, only your income will be taken into consideration. So, which payment plan is best for you and should you file jointly or separately? Sadly, there is no clear answer. The best thing you can do is talk with your partner about what works for your budget and finances.

Again, if you’ve talked it out with your partner and you’re still confused, consider talking to a financial consultant or accountant. Consider sitting down with someone (long before tax season, if you can) to hash out whether filing jointly or separately is more beneficial.

Marriage and loan forgiveness

There are a few loan forgiveness options out there, most notably the Public Service Loan Forgiveness Program, which allows those in the public service industry (such as teachers and nonprofit workers) to discharge the remaining balance of their loans after 120 qualifying payments. This program is great for those whose income-to-debt ratio is high; however, it can be tricky for married couples depending on how you manage your finances.

Here are a few things to consider:

  • Do you want to pay your debt off in less than 120 payments (10 years)?
  • Do you plan on staying in public service for 10 years?
  • Will your spouse help you with your payments or will you be solely responsible for them?

If you keep these things in mind, your loans and your marriage will be happier for it.

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