Student loans

What is the impact of marriage on student loan debt?

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First comes love, then comes marriage, then comes…revaluation your and your spouse’s student loan debt. It’s not the most romantic process, but it’s paramount, especially considering that the majority of college graduates carry student loan debt.

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Marriage can affect student loan debt in many ways, which is why it’s essential to work out answers to the following questions with your partner:

  • What type(s) of credit have you taken out?
  • What are the loan statuses and payment history?
  • What are the loan balances?
  • What is the monthly payment amount?
  • What are your student loan repayment plans?

Know the answers to these questions before diving into the fine print – which is long.

You can repay your loan in different ways

You and your new spouse have several ways to repay your federal loans. You can do the following:

  • Make monthly payments based on how much you owe and how long you’ll pay off your loans
  • Make income-contingent payments based on how much money you collectively earn and your family size

How you file your taxes can affect your payments

Spouses have the choice of filing their tax return jointly or separately. When deciding what’s right for you, consider that if you have an income-based repayment plan, the federal government:

  • Use your joint income if you file jointly
  • Reduce your payments for your spouse’s student loan debt if you are filing jointly
  • Base payments only on your income if you file taxes separately – unless you’re in the revised Pay As You Earn plan, as noted below

Your monthly payment may increase

The RPAYE plan determines monthly payment amounts based on the spouses’ combined adjusted gross income and loan debt. It doesn’t matter whether you file your taxes jointly or separately. This means that your monthly amount due could increase.

Your spouse can carry your debt — and you theirs

A debt you incur in a marriage – as opposed to a debt you incur during your marriage – generally remains your sole responsibility. However, there are certain circumstances in which you could be responsible for your spouse’s debt and vice versa, according to Student Loan Hero. This should only happen if one of you dies, and it should only happen if you borrowed from a private lender.

Now, if you go back to school while married and your spouse co-signs your loans, they will be legally responsible for your debt if you don’t make the payments. Even without a co-signature, you and your spouse could be held responsible for each other’s student loans taken out during your marriage. It depends on the state you live in. The following community property states require you to share the debt: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. In these states, even divorce cannot immunize you from your partner’s debt if they incurred it while you were married.

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Learn: How to Cope When You or Your Partner Have Significant Debt

Speak to a CPA or financial advisor

Marriage and debt are complicated on their own and doubly complicated when mixed together. To better anticipate the situation, it is ideal to speak to a financial advisor or a CPA before you get married. If you are already married, be sure to speak with a professional before filing your tax return. It is important to weigh the pros and cons of joint filing versus separate filing based on your particular situation.

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