Marrying Someone with Student Loan Debt: Everything You Need to Know

Are you thinking about tying the knot with someone who has significant student loan debt? If so, it’s important to learn as much as you can about marrying someone with student loan debt before saying, “I do.”

Student loan debt usually isn’t an insurmountable obstacle in a relationship (although it may be for some people). However, debt of any kind is an essential topic to discuss with your partner to create a solid foundation for your life together.

What Happens When Marrying Someone with Student Loan Debt?

Knowing exactly what you will and will not be responsible for if your spouse has student loan debt is a good first step when you’re hashing out your marital finances. If you know you’re marrying someone with student debt, these six points will help you navigate some potentially rough waters.

In most cases, you’re not liable for your spouse’s debt from before marriage.

Student loan debt that your spouse incurred before you’re married will almost never be considered your liability. An exception to this is if you cosigned on your future spouse’s student loan(s) or if you refinance the student debt with your spouse after you’re married.

While you won’t be held legally liable for your spouse’s prior student loan debt in most cases, you may still decide to take on some responsibility for your spouse’s debt repayment. This will depend on how you decide to manage and merge your finances as a married couple.

For example, you may focus on household bills while your spouse repays their student debt. Alternatively, you could choose to each pay half of the household bills and continue paying your individual debts separately.

Your spouse’s income-driven repayment plan might change.

For a single, unwed person, the paperwork for an IDR (income-driven repayment) plan is fairly simple. You share your own personal information about yourself and your finances. When you get married, however, that simple process gets a lot more complicated.

Depending on how the two of you choose to file your taxes, your income could impact your spouse’s IDR plan. If maintaining your spouse’s IDR plan is a top priority, you’ll need decide on the best way to file your taxes.

Simply put, getting married will increase your spouse’s total household income if you earn a paycheck. Since IDR uses taxes to determine how much you pay per month, a higher household income could mean a higher loan payment under an IDR plan.

You can avoid this by filing your taxes separately when you’re married, rather than jointly. However, filing separately means you’ll miss out on some benefits you would get if you filed jointly, including valuable tax breaks and credits, as well as the student loan interest tax deduction.

It’s important to decide together whether you may be able to handle a bigger monthly loan payment to cash in on these benefits, or if maintaining a lower monthly payment is a higher priority.

You could refinance the loans as a cosigner.

Your spouse’s student loans might not have an ideal interest rate. If after sorting through the numbers you find that your spouse is paying more than absolutely necessary in interest, it may be worth looking at debt refinancing and consolidation.

While you can’t consolidate your student loans together with your spouse’s student loans, you can consolidate your spouse’s multiple loans together into one or refinance a loan to get a better interest rate.

Your spouse can do this separately by applying to refinance their loan or consolidate their loans. They may qualify for a better interest rate depending on their financial information and credit score. If you have higher credit than your spouse, cosigning on the loan could get the interest rate down even lower.

Before diving into cosigning on your spouse’s student loans, make sure you’re committed to taking on the liability. Cosigning on a loan makes you legally responsible for repayment if your spouse fails to pay.

Your spouse’s debt could affect your financial future as a married couple.

If your spouse is weighed down with a significant monthly loan payment, it could affect your financial future as a couple.

Depending on your own income, you may be able to tackle the large expenses, like housing and food, while your spouse focuses on paying down debts.

If that’s not a possibility, and your spouse’s income is essential for supporting your life together, you may be restricted in terms of major milestones like buying a house or traveling.

It’s important to keep this fact in mind when you discuss finances with your spouse. While it might not be a deal breaker for your marriage, you can set some goals for yourselves as a couple that are more reasonable and realistic given your financial boundaries.

Adjusting these expectations can go a long way in avoiding future tension and stress related to your spouse’s student loans.

Your spouse’s student loans won’t affect your credit score.

When you get married, your credit history and score remains your own, as does your spouse’s. Credit bureaus look at each person’s credit profile separately and don’t mix married couples’ credit scores together.

What’s more is you usually don’t have to worry about your spouse having a bad credit score just because they have student loans. As long as they’ve made payments on time every time, your spouse’s credit score could actually be improved by holding student loans.

However, it is important to find out your spouse’s credit score. If you choose to apply for a loan together in the future, a bad credit score on your spouse’s end could make it harder to get approved.

You’ll need to have some serious conversations about debt.

Whether your spouse is the only one with debt, or you have some yourself, talking about debt and finances is essential before and during marriage.

Money isn’t the most romantic topic of conversation, but avoiding it can lead to friction and a lack of transparency in your relationship. This tends to be especially true if one partner holds debt while the other does not. Your spouse may feel embarrassed by their debt, or you may be surprised to find out how much debt they actually have.

Rather than putting off the discussion until you go to file your taxes together for the first time, have the conversation early and often. Decide whether you’ll tackle debts together or separately, and how you’ll do so in practical terms.

The first step is getting each of your financial histories together: that includes debts, credit scores and income information. Lay it all out on the table with the real numbers in front of you to create a solid plan going forward.

Debt and Marriage: Who’s Responsible for What?

To understand student loan debt and marriage, it can be helpful to look at the bigger picture of debt as a whole. After all, your spouse-to-be could have multiple types of debt from college (student loans plus credit card debt, for example).

Timing is Everything

As a general rule of thumb, your liability for your spouse’s debts depends on when those debts were incurred:

• Money borrowed or debts incurred before marriage remains separate in terms of liability.
• If your spouse borrows money or incurs a debt after you’re married, you could be liable. This depends on the state you live in and other factors.

As discussed above, this means you usually won’t be liable for any student loans your spouse took out before you’re married.

If your spouse takes out student loans after you tie the knot, your liability depends on whether you live in a community property state or a separate property state. (An exception to this is if you’re already married and you cosign on the loan, in which case you are liable for the debt.)

Community Property States vs. Separate Property States

In the United States, there are community property states and separate property states. These two state types have different rules when it comes to debt accrued during a marriage, as well as other financial matters.

Community Property States:

• Consider property, wages and salaries, investments, and debts “community property”.
• Assets and debts owned before marriage remain separate.
• Each spouse is liable for, or entitled to, half of the debts or assets acquired during the marriage (with the exception of gifts and inheritances).
• Each spouse reports 50% of the total community income on tax forms, rather than their separate income, when filing separately.
• These states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.

Separate Property States:

• Consider debts and assets “separate property”.
• Assets and debts owned before marriage remain separate.
• Assets and debts acquired during marriage are only owned by whoever’s name appears on the loan, contract, registration or deed. (If you cosign on a loan taken out by your spouse, you are liable.)
• Each spouse reports 100% of their own individual income on tax forms when filing separately.

What About Divorce?

No one likes to think about divorce at the start of a marriage. But it is reasonable to ask whether you’ll be responsible for your spouse’s student loans if a divorce should occur.

If your spouse took out the loans before you were married, you are not liable, whether you’re in a community property state or separate property state.

If your spouse took out the loans while you were married, matters of liability can be more nuanced when it comes to divorce, even if you’re in a separate property state. Divorce courts often look at more than just who’s name is on the loan.

For example, some courts will consider a professional degree earned during a marriage as joint property, making you partially liable for your spouse’s educational expenses, including loans. If you’re the higher-earning partner, this could also mean you’re asked to chip in for your ex-spouse’s loan payments.

If you cosigned on the loans at any time, you are liable as a signer on the loan.

Approaching Debt in Marriage

Before you get married, it’s important to decide how you’ll approach your finances, including debt, as a married couple. By getting this decision out of the way early, you can avoid some unnecessary friction in the early years of your marriage. There are three different approaches to managing your finances together:

• Completely Individual Finances

You and your spouse keep everything the way it is. You don’t create a joint account, and you keep paying your own bills. You will have to decide how to divvy up household bills like rent/mortgage and utilities.

• Merged Finances

You and your spouse decide to handle all money matters as a team. You combine your checking and savings account into one joint account. You no longer have personal accounts.

• Combination Approach

You and your spouse keep your separate accounts and pay your own personal bills, but you create a joint account for shared bills.

Having a transparent conversation about finances before your wedding can save a lot of stress down the line. You may think you know how much student debt your fiancé has, but do you know the exact figure?

While you may not be legally liable for your spouse’s debt, that doesn’t mean you can’t help out with the payments. Part of hashing out your marital finances is deciding whether or not you’re going to take on responsibility for your spouse’s debt, whether you’re technically liable or not.  You may agree to keep your debts separate or work on them together.

No matter how you choose to approach debt in your marriage, it’s important to know if you’re marrying someone with student loan debt and decide how you’ll handle it ahead of time.