Does Getting Married Affect Your Student Loans?

Getting married is an exciting milestone in life. However it also brings about several changes including how your student loans are handled. Marriage can affect student loan repayment, interest rates, tax benefits, and more. Here’s what to know about how saying “I do” impacts your student debt.

Your Spouse’s Loans Don’t Directly Affect You

• Your credit scores remain separate after marriage – your spouse’s student loan debt does not directly impact your credit.

• You are not responsible for loans your partner took out when single unless you co-sign a loan together.

• Defaulting on a loan only in your spouse’s name does not affect your credit

So in most cases, your spouse’s student loans do not become your responsibility simply because you got married. However, there are some key ways marriage can change the outlook for your existing loans.

Your Repayment Plan May Change

• If you are on an income-driven repayment (IDR) plan, your payment often increases after marriage.

• IDR plans calculate your payment based on household size and income.

• After marriage, if you file taxes jointly, your combined income is used to determine your affordable monthly payment.

• A higher household income typically increases your expected monthly installment.

• You must recertify your IDR plan each year – your payment can go down if your income is later reduced.

So be prepared for your IDR payment to initially increase with your new combined income. But it’s not guaranteed to stay higher if your financial situation changes down the road.

You May Lose Some Tax Benefits

• The student loan interest deduction has income limits for eligibility.

• If you file jointly, your combined income could make you ineligible for this tax break.

• For example, if your joint income exceeds $170,000, you can no longer claim the deduction.

• You also can’t deduct the interest if you file separately and your income is over $85,000.

So weigh the pros and cons if you think filing separately could help you keep the deduction. You may pay more in taxes overall or lose other tax credits.

Your Eligibility for New Loans May Change

• Lenders will consider your spouse’s finances and debts when you apply for financing together.

• Even with great credit, high existing debts or a lower score for your partner could impact the terms you receive.

• If you co-sign a new loan, you are equally responsible for repaying the debt.

Be sure you can afford the monthly payments before co-signing your spouse’s loan. Defaulting or becoming delinquent on a joint loan would damage both your credit.

You Have Options for Managing Joint Student Debt

• If you refinance existing loans together, you can combine your debt and share the burden.

• This lets you simplify repayment with one monthly bill at a lower interest rate.

• Or you can co-sign a spouse’s new student loan to help them return to school while sharing responsibility.

• Make sure your finances can handle the loan terms before pursuing these options.

Managing student loans jointly requires open communication about your finances and debt tolerance as a couple.

Your Responsibility for Loans After Divorce

• You are generally not obligated for a spouse’s sole student loan debt after a divorce.

• However, if you co-signed their loan, you remain responsible for making payments.

• A divorce decree does not release you from a shared student loan – you must refinance the debt or be formally removed from the account.

So be cautious about co-signing loans with a spouse if you think divorce could be a possibility down the road. The debt obligation stays with you.

Tips for Handling Student Loans During Marriage

• Discuss your finances transparency and make a joint budget. Being on the same page is crucial.

• Be strategic about how you file taxes – run the numbers each year on payments.

• Research repayment options like income-driven plans and consolidation.

• Maintain your credit health by making monthly student loan payments on time.

• Live within your means and avoid relying heavily on loans or credit cards to cover costs.

• Seek professional advice from a financial planner or accountant if needed.

Managing student debt as a couple takes compromise, honesty about your finances, and a unified approach. While marriage may shift how you repay student loans, being proactive and informed can help you navigate any changes smoothly. The important thing is working together toward shared financial goals.

Key Takeaways

• Your spouse’s individual student loans do not affect your credit or become your legal responsibility when you get married.

• However, marriage may increase your monthly student loan payment if you are on an income-driven repayment plan.

• Filing joint taxes could make you ineligible for tax benefits like the student loan interest deduction.

• Co-signing a new loan together makes you both liable for repaying the debt.

• You’re generally not responsible for an ex-spouse’s student loans after a divorce unless you co-signed.

• Communicate openly about finances and budget wisely to manage student debt as a married couple.

So while marriage may bring about some changes to your student loan situation, being prepared for the potential impact can help you navigate this new stage of life without financial surprises.