Understanding how marriage affects student loans can be tricky. For instance, you might wonder whether a spouse is responsible for student loans incurred before marriage, or what happens after a divorce.
Although tying the knot will likely alter certain aspects, such as income-driven repayment plans, most future spouses aren’t responsible for their partner’s student loans. However, this depends on when the debt was acquired, who cosigned the loan and where you reside.
Before getting married, it’s best to know who is liable for student loan debt since the answer can sometimes be complicated.
Am I responsible for my spouse’s student loan debt?
In general, marrying someone with student loan debt won’t make you liable for their loans. The contracts for federal and private student loans stipulate that only the person signing the promissory note is under a legal obligation to repay the debt.
However, any of the following three situations might make you liable for your spouse’s debt:
- You cosigned your partner’s loan
- You combined student loan debt into a Joint Spousal Consolidation Loan
- You and your spouse live in a community property state (Nine of the 50 states fall into this category, as listed below.)
Joe has $30,000 in federal student loans and $40,000 in private student loans before he marries Jane. While Jane can choose to help pay down Joe’s debt, she’s not legally obligated. This scenario also applies if Joe has previous federal PLUS loans, which are available to parents and graduate and professional students.
Joe and Jane live in a community property state. Joe returns to school and borrows a student loan while he’s married. Whether it’s a federal or private loan, it’s now considered community debt — making Joe and Jane both responsible for payments.
|The 9 community property states|
|● New Mexico
|Separately, Alaska couples can opt into community property rules.|
Is your spouse responsible for student loans incurred before marriage?
As mentioned above, any debt incurred before saying “I do” will generally remain separate, including student loans. This applies even if you and your spouse live in a community property state.
However, if you cosign your spouse’s student loans before marriage, it’s a different story.
When you cosign a loan, you become legally responsible for the debt if the borrower stops repaying the loan, which can make you subject to:
- Collection efforts
- Wage garnishments
And that’s not all. Your student loan agreement could include a cosigner clause that forces full repayment under certain circumstances, such as whether the primary borrower files for bankruptcy. In this case, both your and your spouse’s credit scores could be severely damaged.
Will your former spouse be responsible for student loans after a divorce?
Dividing up assets and debt during a divorce can make your head spin. However, understanding marriage and student loans may come down to the three factors already mentioned:
● Did a spouse cosign the loan?
If you cosigned one or more of your spouse’s private student loans, your legal obligations remain regardless of marital status. However, this doesn’t apply to federal student loans since they don’t require cosigners. (Note: A spouse can cosign on a partner’s income-driven repayment application, but they’re not obligated to repay the loan.)
● Was the debt combined?
If you and your spouse combined your student loan debt into a Joint Spousal Consolidation Loan (discontinued in 2006) or you jointly refinanced a loan to get a lower interest rate, there’s currently no way to separate it into two separate loans. Therefore, you and your spouse are bound to this debt until it’s repaid. That said, the government is seeking to change the rules in this particular situation.
● Do you live in a community property state?
Your ex-spouse will remain solely liable for their own loans if you get a divorce, unless you live in a community property state. Debt assumed during a marriage in a community property state is considered the couple’s joint debt. However, this doesn’t apply to loans taken out before or after marriage, in which case each spouse will be responsible for their respective loans.
Am I responsible for my spouse’s student loan debt after death?
This answer also depends on the specific circumstances.
- Federal student loans are discharged if a borrower dies, while federal PLUS loans are discharged if the parent borrower or student dies.
- If you cosigned on a private loan with your spouse and they die, you may have to continue making loan payments. While it’s not common, some private loan lenders like Sallie Mae will wipe out the debt if a student loan borrower dies.
- For those with a Joint Spousal Consolidation Loan, you’ll still need to keep up with the regular monthly payment even if your spouse dies. Note that the federal government ended spousal consolidation loans in 2006, though you can still refinance private student loans together.
How can I balance student loans and marriage?
Combining households will take planning, compromise and a game plan. Student loan liability isn’t the only issue that couples need to focus on when merging households.
Here are two suggestions to consider when joining financial forces with your loved one:
Be honest when discussing your financial situations
During money discussions, future partners need to be completely honest with each other about student loan debt — or any debt for that matter.
Regardless of who’s carrying excess debt, it’s worth developing a plan because the loans will impact the household’s financial health, including your eligibility for income-driven repayment plans and the ability to refinance your student loans.
Pay back your student loan debt wisely
When discussing student loan debt with your soon-to-be spouse, note that you have a variety of repayment plans available to you.
The following income-driven repayment methods for federal student loans consider the couple’s combined income when filing jointly (though if you file separately, they’ll consider your income alone):
Regardless of how you file taxes, the fourth income-driven repayment method — Revised Pay As You Earn (REPAYE) — will consider both spouses’ income when calculating payments.
Choosing your best way to repay student loans when getting married will hopefully save you money in the long run.