Married with Student Loan Debt: What Each Spouse Needs to Know

The average age for Americans to get married is 27 years old. At the same time, there are approximately 37 million people in the United States with outstanding student loans — and that number continues to grow.

According to recent studies, that breaks down to the following:

• Under age 30: 14 million student loan borrowers
• Ages 31–40: 10.6 million student loan borrowers

And given that there are roughly 50 million Americans in the 20–40 age range, the odds of at least one spouse having student loan debt is huge: about 50%.

So, even if you don't have student loan debt, it's important for each spouse going into a marriage to know what to do with student loan debt, how it can affect both of their finances, and the implications of the debt on their marriage.

When Only One Spouse Has Student Loan Debt

The biggest cause for divorce in the United States is money and finances. Student loan debt plays a huge part in that, especially when only one spouse has student loans. In this situation, it's important for each spouse to know and understand the rules of student loan debt.

First, one spouse isn't liable for the other spouse's loans taken out during college. For example, if the husband took out Federal student loans to pay for school, his wife isn't responsible for the debt, even if they are married.

So, if the spouse with student loans dies, the surviving spouse doesn't have to pay them back. Even if you were married when you took out the loans, only the spouse that took them out is on the hook for them.

However, no matter how you handle your finances as a married couple (jointly, with separate accounts, etc.), each spouse has to realize that a portion of the income coming in will be going to these loans. So, even if only one spouse has loans, the joint income of the marriage will inevitably be going to pay them off.

The important thing to remember is that you're a team, so even if one spouse has debt and the other doesn't, you need to work together to pay it off.

Student Loan Repayment Plans And Marriage

One thing that confuses a lot of borrowers is how income-driven repayment plans work when couples are married. If you're not familiar, income-driven repayment plans based your monthly payment as a percentage of your discretionary income. But that's where it can be tough - especially when one spouse may have substantially higher income than the other spouse.

In general, student loan repayment plans will use the adjusted gross income (AGI) on your tax return. If you file jointly, this is your joint AGI. If you file married filing separately, it's your individual AGI. Note: old REPAYE always required you to use your combined AGI, but the New REPAYE/SAVE plan allows you to separate it. 

This can make figuring out the best approach challenging because filing your taxes separately can also increase how much you owe in taxes. You may want to consult a financial planner. We also have a guide here: filing your taxes separately for student loan repayment. 

How Student Loan Debt Can Hurt a Marriage

The sad fact is that student loans do hurt marriages, especially when only one spouse has them.

The following are the typical scenarios when student loans become a problem.

Resentment

This happens when the debt-free spouse becomes resentful of having to help pay for the other spouse's student loan debt. This is the most common way student loans hurt a marriage and it also typically involves the debt-free spouse earning more than the spouse with student loans.

Poor Debt Choices

This happens when the borrower with student loans makes poor choices with their student loans and it hurts the future of the marriage. For example, going into forbearance and hurting their credit score, which could prevent the couple from buying a house together in the future.

Not Creating a Plan Together

This happens when the spouse with student loans just feels alone and helpless financially in the marriage. Even if you choose to maintain separate accounts while married, you still need to create a plan for your debt together.

Moving Solo Debt to Couple Debt

This can be the worst — when you take an individual student loan and make it the legal burden of both spouses. This can happen in several ways:

• Refinancing the debt with private student loans where both spouses are cosigners. By doing this, you make what was once an individual's student loan, and make both spouses responsible.
• Using home equity to pay off the student loan debt. If you have equity in your home, it's joint money. However, some couples use that equity to pay off one person's student loan debt, but all that really does is shift the debt from the individual to the couple.

The common trend here is trust and partnership. With all of these scenarios, the couples don't act like partners in paying off the debt. As a result, one spouse or the other feels burdened or upset about it.

When you marry someone, you marry them with all of their baggage — including their student loans. So, just like anything else, accept them with that and make a plan together to pay them off.

Creating a Plan for Paying Off Student Loan Debt

The path to success when you're married with student loan debt is to create a joint plan to pay it off. Now, this doesn't mean that one spouse pays off another one's student loan debt. But it does mean that there is acceptance of the debt, as well as teamwork to deal with it.

First, both spouses need to understand and know how much debt they have, where it's located, the interest rate, and how much the monthly payment is. Too many couples skip this step and simply ignore it because "it's the other spouse's problem." Well, guess what — you're a team. It's not just one spouse's problem, it's your family unit's problem.

Step two is to make sure that the repayment plan you're currently on makes sense for your family. Can you afford it? Would it be better to switch to a different repayment plan?

Once you know your debt load, and have a repayment plan, you have to decide how to pay the monthly payments. I'm a believer that this should come out of the couple's joint monthly pot, especially if you're working at the debt as a team.

However, you could set it up to pay it separately if you choose. My only challenge to you is this: what happens if one spouse is struggling to make those payments alone? How will they feel? How will it impact your marriage?

This is a discussion you need to have if the spouse with student loans can't afford them on their own. This is where the tension will arise, but having agreement on this issue will make the entire issue better!

Finally, you need to stick to your commitments, follow through on the plan, and not judge each other for the debt. When you finally become free of student loan debt, you will feel so much stronger as a couple for tackling this issue together. I promise.

Do you have any tips for tackling student loan debt as a married couple?