by Maja Majewski

Till Debt Do Us Part? Balancing Student Loans and Marriage

Getting married is usually a financial ‘do’, but what about if you have debt? Here’s what you need to know about student loans and marriage.
Wedding photo of a couple in a park A couple on their wedding day.

There are so many ways that marriage can be financially beneficial: Combining bills, household expenses, and savings can help you and your partner find financial stability faster and more easily than you could alone. Married people qualify for specific tax incentives, lower health, car, and liability insurance, and other financial perks only given to those who are hitched.

There are also the legal implications of marriage, called spousal rights, which include the right to receive spousal Social Security, pension, worker’s compensation, or disability benefits, determine end-of-life care, and inherit their spouse’s property upon death.

In addition to these rights, marriage also comes with legal and financial responsibilities. If you or your partner have student loan debt, here’s what you need to know about marriage and student loans, so that your debt doesn’t negatively impact your marriage before you even say, “I do!”

Communicate, and seek help

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

  • How much total debt do you each have?
  • What types of payment plans are you utilizing?
  • How much are you paying in interest on your student loans?
  • When do you plan on having your loans paid off or forgiven?
  • Will you both be paying down the debt(s) 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 that works for both of you.

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.

Know who’s responsible.

It should be noted that if you took out your loans before you were married, then that student loan repayment 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.—that will affect both you and your partner in the long-term.

If your spouse does co-sign your loan, they are responsible for your debt if you default on student loan payments. In some states, your spouse doesn’t even need to co-sign to be liable for your loans. The same is true for your spouses’ loans—if your partner defaults on their loans and you co-signed, you’ll be responsible.

If you’re married and take out a student loan in a community property state, your spouse is held responsible for any loans you owe. 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.)

Investigate different student loan repayment plans.

It’s no secret that student loan debt is a national crisis. Roughly 43% of Americans who went to college took on some form of debt in order to do so, according to the Federal Reserve. But that number is even higher for today’s students, 54% of whom need to borrow to cover their educational costs. All together, Americans owe over $1.6 Trillion in student loans.

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 not, it’s worth it for you to do your homework when it comes to how to pay off your loans.

Be sure to check out these income-driven repayment plans:

  • Income-Based Repayment
  • Pay As You Earn
  • 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.

Make a plan for tax season.

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

Investigate student 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 monthly 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.

Pay off your student loans faster.

There are many decisions involved in figuring out how to balance student loans and marriage. The most important thing is honesty, with your partner and yourself. Starting from a place of honesty and transparency gives you the best foundation to build your financial lives together!

For more tips and insights on paying off debt, check out our articles on tackling debt!

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