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Quick Guide: Student Loans and Marriage


There is nothing more beautiful than deciding to share your life with someone whom you promise to love and cherish for the rest of your life together. If you want to have a successful marriage, it’s important to discuss finances before you tie the knot. One of the major issues that couples tend to fight about is finances. Student loans and marriage doesn’t always go hand in hand.
When your spouse brings a lot of student loan debt to the marriage, it’s important to realize that that debt does affect you.

Reduced Payment Plans

Getting married affects your student loans in many situations. If you’ve been living together with your spouse and you have a rhythm going with your income, bills and expenses, you may be in for a bit of a shock once it comes time to complete your tax return. If your spouse is on an income-sensitive repayment plan, pay as you go or income-contingent repayment, the loan payments may be significantly reduced.

Once you’re married, the government will use your combined income to determine your ability to repay your loans. There is no pre-nuptial agreement in the world that can make the government take less money out of your paycheck if you and your spouse are making enough to pay your loans.

If your partner doesn’t have the money to pay the increased student loan payment, you’ll have to help out to ensure that the loans doesn’t go into default. When student loans go into default, they create a sort of black hole that no force can escape from.

Bankruptcy laws likely won’t protect you, and the government can easily garnish your wages if you refuse to pay. We’re talking about the potential of your loan payments to go up several hundred dollars per month depending on how much money you make as a couple.

If you don’t start discussing these issues now, they may serve as a wedge in your relationship.

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The Inseperable Marriage

You’re marriage is likely on solid ground, but we’re not talking about your commitment to each other. Many newlyweds believe they can get around the combined income issue by filing separate tax returns. It won’t work if one of you is paying for your loans under the REPAYE program. That program uses your combined income, and there is no way to use one spouse’s income without including the other.

Filing separately can help you maintain your lower monthly payments with some of the other programs. However, you won’t be able to use your tax form 1098-E to get a tax credit on your student loan interest. Married individuals who file separately aren’t eligible for the deduction. While this may be a minor inconvenience for some, it’s still an issue worth considering.

Getting a Mortgage Together

When you have student loan debt, it’s going to be much harder to get a mortgage. Lenders know that only death can make a student loan obligation go away, and this makes you a greater financial risk. It’s possible to get a mortgage with a student loanpayment, but you’re going to have more trouble.

One option is to work together to pay down your newly acquired student loan debt as quickly as possible. A consolidation loan can help make it easier to manage your payments as well. You can also attempt to get a mortgage before you get married if only one of you has student loan debts. When it comes time to get a new house, you’ll have a good credit history to make it easier to secure the next loan.

Can married couples consolidate student loans together?

A married couple with federal student loans cannot apply for a federal direct consolidation loan in order to combine their loans.

However,  it is possible to merge both your loans by using a private refinancing company.

Just bear in mind that by doing so you forfeit any federal benefits you may be qualified for, like forgiveness, cancellation, discharge, and income-driven repayment plans.

The Reality of Student Loans

While it may not be something you want to consider, it may make more sense to attempt to pay off student loan debt before getting married. With the lasting implications that marriage has on your student loan debt, it’s a decision worth considering.

An individual who has been used to living without student loans, may find it difficult to suddenly deal with the realities of a large loan payment every month. This can cause stress and strain on the marriage. At the very least, it’s something that needs to be discussed before getting married.

Since you don’t want to be hammering out the details of an increased student loan payment after you’re married, make any agreements before you get married. This way, both parties are entering the union with their eyes wide open.

What’s your situation?

Consider a situation where your partner has an income-sensitive repayment plan and you don’t have student loans. If your partner is used to paying a low monthly student loan fee while on an income-sensitive repayment plan, the increase in payments may come as a surprise.

The reality is that the government granted a special payment plan because the income of your future spouse wasn’t enough to make full payments.

Since it’s your income that is making your partner’s loan payment increase, will you offer to help offset the cost of the extra payments for the remainder of the loan period? Remember that student loans may take up to 30 years to pay off depending on the payment plan.

Now, let’s say the situation gets even more complicated. You didn’t have any loans because you never went to school. If you decide to go to school later and your spouse wants to get an advanced degree, the loans that you acquired while married may make it very difficult to keep your finances separate. Will you be willing to split all the student loan payments equally or combine finances entirely and just pay all bills from a single joint checking account?

These are tough decisions, but they are important ones to consider. If you don’t start discussing these issues now, they may serve as a wedge in your relationship.

Credit History

Legally, any student loans that your spouse brings into the relationship are not your responsibility. The payment history will only show up on your partner’s credit report, and it can’t affect your credit score. If you plan on applying for joint credit on a house, car, boat or any other financial investment, your partner’s credit history will come up. The added debt can make it more difficult to get a loan.

It’s important to walk into the marriage together knowing what to expect. Any debt your partner has will affect you. If your partner fails to pay their bills, the car you went in on together could be seized. Your joint bank account could also be affected.

Making It Work

There are several ways to make your monthly student loan payments more affordable. If you have student loans and marriage is on the table, you should consider applying for a federal consolidation loan. Make sure to get a Federal Direct Consolidation Loan so that you maintain the benefits provided to federal student loans and possibly lower your payments.

When considering consolidation, make certain that you don’t consolidate your federal loans with a private lender. The terms are generally not as good on private loans as they are on federal loans, and you’ll end up losing some extremely valuable benefits.

It’s important to be realistic about how your marriage will affect your financial situation. Just because one of you has high student loan payments, it doesn’t mean that you can’t make it work. Sit down and figure out what to expect before you get married so that you can be better prepared to deal with the challenges that arise.

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