Is a Spouse Responsible for Student Loans?
So, are spouses responsible for student loans? They’re usually not, though there are exceptions to this rule. Before you tie the knot, learn when you could be on the hook for your spouse’s student loan debt to avoid any surprises down the road.
- Am I responsible for my spouse’s student loan debt once we’re married?
- Is a spouse responsible for student loans incurred before marriage?
- Will your former spouse be responsible for student loans after a divorce?
- Am I responsible for my spouse’s student loan debt after death?
- Balancing student loans and marriage
Is a spouse responsible for student loans incurred before marriage?
Unfortunately, there’s no one answer. It depends.
Sometimes the answer is no. Marriage can affect your student loans in a number of ways, but thankfully, you won’t be liable for your spouse’s loans as long as they took them out before marriage.
Further, any student debt that you bring into a marriage remains solely your debt.
Let’s say you have $30,000 in Federal Student Loan and $40,000 in private student loans when you get married. Your spouse might help pay down your debt, but you’re the only one legally responsible. (This scenario also applies if you marry someone who has federal PLUS loans, which are available to parents and graduate and professional students.)
Sometimes the answer is yes. It’ll be a different story if you cosigned your spouse’s student loans before the marriage.
If you’re a cosigner, you’re legally responsible for the debt if the borrower stops repaying the loan, which can make you subject to:
- Collection efforts
- Lawsuits
- Judgments
- Wage garnishments
That’s not all, though. If you cosigned your spouse’s student loan and they later file for bankruptcy, you would still be responsible for that debt. In this instance, both you and your spouse’s credit scores could be severely damaged.
Is a spouse responsible for student loans incurred after marriage?
Again, it depends. If you live in a community property state and your spouse borrows a student loan while you’re married, the debt would be considered community debt. Whether it is from federal or private loans, it’s shared by both spouses.
There are nine community property states:
- Arizona
- California
- Idaho
- Louisiana
- Nevada
- New Mexico
- Texas
- Washington
- Wisconsin
Separately, Alaska couples can opt in to community property rules.
Will your former spouse be responsible for student loans after a divorce?
Here too, it depends.
Sometimes the answer is yes. If you’re a cosigner on one or more private student loans and you get divorced, your legal obligations remain — it’s irrelevant to the lender whether or not you’re married.
Sometimes the answer is no. Most federal student loans don’t require cosigners. And while a spouse can cosign on a partner’s income-driven repayment application, they wouldn’t be obligated to repay the loan.
Sometimes it’s both yes and no. Your ex-spouse will remain solely liable for their 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, though according to Stanley Tate, a student loan attorney in the St. Louis suburbs, this reality is misleading.
A divorce settlement might state that the divorced couple will each be responsible for the student loan debt — but as Tate notes, the lender won’t care. A lender will still consider the borrower to be liable for the loan. If the former spouse, who didn’t take out the loan, stops paying, the lender will only go after the original borrower. When this happens, the aggrieved party could sue if their ex-spouse doesn’t pay, but Tate says that this doesn’t happen in the “overwhelming number of cases” because of the legal costs.
Am I responsible for my spouse’s student loan debt after death?
Once again, this depends on the situation.
Sometimes the answer is no. Federal student loans are discharged if a borrower dies, while federal PLUS loans are discharged if the parent borrower or student dies.
Sometimes it’s both yes and no. If you cosigned on a private loan with your spouse and they die, you may have to continue making loan payments. However, while it’s not common, some private loan lenders — such as Sallie Mae — will wipe out the debt if a student loan borrower dies.
Sometimes the answer is yes. If you combine your debt through student loan consolidation, you’ll be obligated to pay your spouse’s debt (note that the federal government discontinued joint spousal consolidation in 2006). Although you may be able to find a private lender who offers this type of loan, it’s usually not a good idea to combine your student loans with your spouse’s. That being said, it’s always a good idea to seek legal advice.
Should my spouse and I consolidate our student loans?
If you and your spouse both have federal student loans, you may want to avoid refinancing them with a private lender for the sole purpose of consolidation. Swapping your federal student loans with private loans means losing access to federal student loan protections like loan forgiveness and income-driven repayment plans. Spousal consolidation can also make life incredibly complicated if you and your partner separate or divorce.
Balancing student loans and marriage
Combining finances 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.
Be honest when discussing your financial situations
During money discussions, it’s important for future partners to be completely honest with each other about student loan debt — or any debt for that matter. Regardless of who is bringing debt into the marriage, it’s important to develop a plan with which both partners agree. This is critical because the loans will impact the overall finances of the household.
Some partners might be tempted to conceal their debt, but in the end, this may prove to be fruitless. If you buy a house or pay taxes jointly, the truth will likely come out. Even if you think you can hide the truth about your finances, that’s not a good way to start a marriage. It’s best to be open and upfront about any debt, because your significant other will probably find out eventually.
Pay back your student loan debt wisely
If you have a federal student loan and are considering an income-driven repayment plan (IDR), how you file your taxes after you’re married will affect how your monthly payments are recalculated.
For instance, most IDRs consider both your and your spouse’s annual incomes when determining your new monthly payment, but only if you file your taxes jointly. If you submit your taxes as married filing separately, however, only the borrower’s income is considered.
The following IDRs will only consider the borrower’s income if you file taxes separately from your spouse:
- Pay as You Earn (PAYE)
- Income-based repayment (IBR)
- Income-contingent repayment (ICR)
On the other hand, the Revised Pay as You Earn (REPAYE) plan always considers both incomes, regardless of how the couple files their taxes.
Choosing your best way to repay student loans — and file your taxes — when getting married could potentially save you money down the line.