Married Couples and Student Loans

Credit Info, Financial Planning

When you said “I do”, having two sets of federal student loan payments probably wasn’t your favorite part of the deal. But the good news is these loans have more repayment options and possible breaks than most other loans. While you never intended to say “I do” to more debt, we hope answering three of the most popular marriage and student loan questions helps ease some of your concerns.

Is My Spouse Legally Responsible for My Loans?

No. Student loans do not go on each other’s credit reports when you get hitched. Your loans stay with the individual that borrowed the money, and remain that way through single life, marriage, and divorce.

Whose Federal Loans Do We Pay Off First?

There are two sets of answers to this question. The communal method suggests looking at you and your spouse’s loans as belonging to you jointly. In this scenario, you pay off any private student loans first, since these loans can change in interest over time – similar to a credit card  – and have fewer hardship repayment options. If neither of you have private student loans, then you should pay off your highest interest rate loans first – unless one of you qualifies for income-based repayment. (We’ll go deeper into income-based repayment later in the article).

The other answer applies to couples who are newly married or will keep finances relatively separate. Since your spouse isn’t legally responsible for your student loans, you may not want to work together to pay off your honey’s loans before your own – no matter what the interest rate difference is. Thus, you have several options under the individual theory. Each of you pays your student loans out of your own paychecks. To pay off your student loans together (but not one person’s debt before the other), you can try the equal amounts system.  Set an amount above your minimum payments that goes towards each of your debts. For example, if you have $200 total between the two of you for speeding up debt repayment, add $100 to your individual loan payments.

While it may seem unromantic to think of your loans as individual property, there are long term benefits should you ever get divorced. There are circumstances where you would qualify for a temporary break from loan payments, reduced payments, or loan forgiveness personally, but not if  listing your partner’s income.

Will Marital Income Affect Income-Based Repayment Options?

Yes. If you file a joint tax return, you’re combined adjusted gross income (AGI) determines your eligibility for income-based repayment. For example, let’s say your AGI is $10,000 this year while your spouse’s is $60,000. Each of you has $50,000 of federal student loan debt at 6.8%. If you filed individually, you’d pay $0 on income-based repayment. Your spouse pays $475. If you filed a joint return, you’d each pay $300. This reason alone isn’t a good reason to file separately, but it’s a reason to compare filing options at tax time. If you utilize TurboTax or other tax software, fill out both individual and joint returns and then file whichever option works out better for you each year.  

Reyna Gobel is a freelance journalist who specializes in financial fitness. She is also the author of Graduation Debt: How To Manage Student Loans and Live Your Life.

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