There are a number of important discussions that need to be had before proceeding with marriage, but one often overlooked discussion is that of student loan debts. If you're considering marriage but are worried about how loans will impact your lives, read up on the answers to these three important questions.
1. Will My Loan Payments Be Recalculated?
If you're currently repaying your student loans under an income-based plan, then marriage could certainly affect the amount you pay per month.
For example, if you make $50,000 and your new spouse makes $80,000, your income just skyrocketed from $50,000 per year to $130,000 per year. If you intend to file taxes jointly, your loan servicer will combine your two incomes and your payments will likely increase, even if your spouse has their own student loan payments to make. There are certain things that can be done to minimize the impact of an increased income, such as filing taxes separately, but all options should be carefully considered.
2. Will My Spouse Ever Become Responsible for My Loans (Or I for Theirs?)
While certain debts can be passed to you upon the death of your spouse, federal student loans are fortunately not one of them.
It doesn't matter whether you live in a community property state or not, federal loans are the sole responsibility of whoever took them out, even if they were taken out during the marriage. Private loans, on the other hand, may be passed along to you with the exception of three – Sallie Mae's Smart Option, New York HESC's NYHELPs loans, and WellsFargo. If you do have private loans that can pass to a spouse upon your death, consider paying more than the monthly minimum on those. This will slowly chip away at the private debt making it easier for your spouse to pay them off in the event that they do become widowed.
3. What Other Impacts Could This Have On the Relationship?
While you won't be responsible for your spouse's student loans in the majority of cases, there are other financial aspects to consider.
If one spouse has significantly more debt than another, this could add resentment to the relationship, especially if your lives are on hold until payments are completed. Buying a home, starting a family, and changing career paths are all things that may need to be put on the back burner until the majority of loans are repaid and monthly payments take up less of your usable income. This is something to seriously consider and discuss prior to marriage.
To learn more about student loans and how marriage can affect your repayment situation, consult with a financial advisor or accountant.
For loan programs, contact a company such as First Mortgage Company, Inc.