How Does Marriage Affect Student Loan Debt?

Millions of undergraduate students need financial aid to cover their education costs. This includes grants, scholarships, federal student loans, and student loans from private lenders. Borrowers are responsible for loan repayment for years after graduating. It can limit their financial freedom and affect their life decisions.

Some college graduates put off getting married because they’re unsure how marriage will affect their student loan debt. Marriage can change your student loan repayments if it changes your income. However, this can depend on your specific situation. For guidance on how marriage will affect your student loan debt, talk to a local family law attorney for legal advice.

What Happens to Your Student Loans After Marriage?

Getting married can impact your student loans. Generally, your new spouse won’t be responsible for paying for your loans, but a change in your combined income can change your monthly payments. Some borrowers may have higher income-based repayment (IBR) amounts, and others may have lower payment amounts. Including your spouse’s income on your tax return can also change your student loan interest deduction.

Before getting married, talk to your prospective spouse about your financial situation. Make sure you both understand your income and financial liabilities, including federal student loans. It can be uncomfortable to talk about credit scores and federal loan debt. However, being open about your personal finances can save you from more serious disputes later.

Does Marriage Affect Student Loan Payments?

Marriage affects student loan payments because of the likely change in your household income. Many student loan borrowers make income-contingent repayments. Payment amounts depend on your household income and family size. Payment plans require you to make monthly payments as a percentage of your discretionary income. Any remaining debt is forgiven at the end of the income-driven repayment plan payment period.

If you get married and your spouse makes an income, your annual income and your family size increase. Generally, your revised pay amount could increase if your spouse earns a good salary. If your spouse makes little money, your loan payment could decrease.

Marriage also changes your tax filing status. The interest payments on your student debt can be tax deductible. For some taxpayers, an increase in their tax bracket will mean they can deduct more of the interest payments. However, this depends on your income tax situation.

Are You Responsible for Your Spouse’s Student Loan Debt?

You aren’t responsible for your spouse’s student loans acquired before marriage. But if your spouse refinances their loans with a new lender and you cosign as a guarantor, you will be financially responsible.

Refinancing may be a way to reduce student loan repayment amounts with a lower interest rate. But make sure you understand how cosigning with a private student loan servicer will affect your credit score.

Are There Tax Benefits for Married Couples With Student Loans?

For most taxpayers, there are benefits to filing jointly as a married couple instead of filing taxes as a single filer. As a married couple, you may be able to take more tax deductions and get more tax credits. This includes the student loan interest deduction. The credit phases out based on your modified adjusted gross income. The gross income limit for student loan interest is higher for married couples than for single filers.

For some repayment plans, you can file your taxes as married filing separately to only include your income for repayment plan proposes. Talk to your tax professional about your filing options.

Should You Have a Prenuptial Agreement for Student Loans?

Some couples use a prenuptial agreement to address financial assets and liabilities before marriage. A prenup is a legal contract between spouses that covers what will happen in the event of a divorce. Your prenup could clarify who is responsible for the student loan debt after marriage. For example, if one person gives up their career, they may want their spouse to cover their loan payments.

Will My Spouse Get Student Loan Forgiveness?

The federal government offers a few income-driven (IDR) repayment  plans to borrowers:

• Saving on a valuable education (SAVE) (formerly known as the REPAYE Plan)
• Pay as you earn (PAYE)
• Income-based repayment (IBR)
• Income-contingent repayment (ICR)

With IDR student loan repayment plans, any remaining loan balance will be forgiven at the end of the repayment period. Make sure your federal student aid IDR plan is eligible for student loan forgiveness.

How Can You Get Legal Advice About Marriage and Student Loans?

Questions about student loan payments and tax filing depend on your situation. Getting married can increase or decrease your loan payments, or it may have no change. Talk to a lawyer for questions about marriage benefits and preparing for any loan payment increases. An experienced family law attorney can explain your legal options and help you plan for the future.