How Does Marriage Affect Student Loans

Last Updated on August 25, 2023

Getting married can have a number of different effects on your student loans. Some of these changes may be beneficial, while others may not be so great.

So how does getting married affect your student loans? Let’s take a look at the most common situations and how they’re affected by marriage.

1) You’re Getting Married in Your Parent’s Home State

If you’re getting married in-state and want to stay there after you tie the knot, then congratulations! Your student loans should not be affected by your marriage at all. However, if you plan on moving to another state after the wedding, you’ll need to make sure that your loans follow you across state lines before it happens. If they don’t automatically transfer with you, then you’ll need to reapply for them and possibly pay any accrued interest or fees associated with late payments while they were being held by another state’s collection agency (if applicable). It’s also recommended that students inform their lenders about any upcoming changes that may affect their ability to pay back their debt before it becomes an issue later down the road.”

How Marriage Affects Your Student Loans - NerdWallet

How Does Marriage Affect Student Loans

If you’re on an income-driven repayment plan for your federal student loans, getting married could affect your payments.

If you file your taxes as “married filing jointly,” your income and your spouse’s income will be combined into one adjusted gross income. As a result, your bill could increase.

If you’re reporting joint income, you might not be eligible for certain income-driven plans. That’s because to qualify for income-based repayment or Pay As You Earn, your monthly payment must be less than what it would be under the standard repayment plan. So, while marriage might reduce your tax bill in other ways, you could lose out on some student loan benefits.

One alternative is to file your taxes as “married filing separately,” which typically reduces your student loan bill on an income-driven plan compared with filing jointly. Note that the Revised Pay As You Earn (REPAYE) plan considers both incomes regardless of whether you file separately.

What’s more, filing separately could cost you other tax breaks that you get from filing jointly, meaning it wouldn’t necessarily be worth it. If you’re concerned about the financial implications of student loans and marriage, consult a tax specialist or financial expert to decide what’s best for your situation.

  1. Your spouse could be responsible for your loans
    In certain circumstances, your spouse could be responsible for your student loan debt. While all federal loans and some private loans offer a death discharge if the borrower dies, some private loan lenders might not. If they don’t, they might try to collect the debt against the estate. So be sure to read the fine print.

If you go back to school and your spouse cosigns your loan, they will be legally responsible for your debt if you fail to make payments.

Even without cosigning, your spouse might be liable for your student loans. This is the case if you take out a student loan after you’re married and live in a community property state, such as Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington or Wisconsin. In the event you got divorced, you could be responsible for your partner’s debt if they incurred it during your marriage and you live in one of these states.

You could also be responsible for your spouse’s post-marriage loans if they go into default. In this situation, the government could try to garnish your wages or tax refund (if you filed jointly).

  1. Not every lender allows you to refinance your student loans jointly
    If you want to refinance or consolidate your student loans and those of your spouse’s into one convenient payment, you might be disappointed by your options.

You cannot pursue consolidation for your federal loans as a couple — only as individuals.

However, some private lenders allow couples to consolidate loans. Ask a student loan refinancing lender you’re interested in if they have a policy allowing couples to consolidate their loans and refinance them to a lower interest rate.

  1. You might stop qualifying for the student loan interest deduction
    While student loans can be a financial burden, they offer a small perk during tax season. If you paid student loan interest in the past year, you could be eligible for a tax deduction of up to $2,500.

However, you can only qualify for the student loan interest deduction if you make less than $85,000 in gross adjusted income. Once you’re married, you can only qualify if you make less than $170,000 jointly.

Even if you file your taxes separately, this $170,000 combined income threshold still applies. So if getting married means your joint income is higher than this cutoff, you’ll no longer be able to claim the student loan interest deduction.

  1. Your spouse could help you with payments
    While it’s easy to focus on the potential negative consequences of student loans and marriage, there could be a benefit: Your spouse might offer to chip in on payments. Whether or not you’re combining your income, you or your spouse might choose to help the other pay off their student loans.

Of course, this arrangement will be based on your own private agreement with each other. If you or your spouse borrowed the loans before you got married, neither is legally responsible for paying back the other person’s debt.

Look at the big picture, read the fine print and come up with a plan to manage the debt. Happily ever after is much more attainable when you’re both on the same financial page.

student loans married vs single

You tied the knot, but you still have one more item to address on your newlywed to-do list: student loan debt. The first thing you will want to do is find out who has student loans, the loan type, the loan balance, monthly payment, payment history, and the payment status. Next, discuss the original student loan repayment plan. Your newly minted marriage status will likely cause it to change. Last, explore your payment plan options using the estimating tools and resources on to help plan your financial future.

You have more than one way to repay.
You have several ways to repay your federal student loans. These strategies include either a standard payment that divvies up the amount you owe over time or an income-based or income-driven payment that aligns your student loan payment to your adjusted gross income. It’s important to crunch the numbers with your spouse when it comes to an income-driven repayment (IDR) plan, which we’ll get into a little later.

Your income tax filing status affects the amount you repay.
You can either file a joint income tax return with your spouse or file separately. We will generally do the following:

Use your joint income for an income-driven repayment (IDR) plan if you and your spouse file a joint tax return.
Use only your income if you file taxes separately from your spouse.
Reduce your payments to account for your spouse’s student loan debt if you file taxes jointly.
Regardless, you must recertify your income and family size each year to remain on the IDR repayment plan.

This table shows how we calculate payments based on each specific repayment plan and whether you’re married filing jointly or separately.

Repayment Plan Income Considered When Married Filing Jointly Income Considered When Married Filing Separately
Revised Pay as You Earn Joint Income Joint Income
Pay As You Earn Joint Income Individual Income
Income-Based Repayment Joint Income Individual Income
Income-Contingent Repayment Joint Income Individual Income
We’ll reduce your payments to account for your spouse’s student loan debt if you file joint income taxes.
Any time we use joint income to calculate your payment amount, we consider your spouse’s federal student loan debt and prorate your payment based on your share of the combined federal student loan debt.

And for the record, your spouse will not need to repay his or her federal student loans under the same repayment plan.

Here are some examples.

Let’s say you file a joint income tax return with your spouse. You earn $40,000. Your spouse makes $60,000. You don’t have kids, and you live in the contiguous 48 states. Your combined income is $100,000.

Under the Pay As You Earn (PAYE) plan, payments are 10% of your discretionary income, which uses poverty guidelines. That works out to $615.58 per month.

Pay As You Earn (PAYE)
Plan Combined Income, Different Salaries
Your Income $40,000
Your Spouse’s Income $60,000
Combined Income $100,000
2021 HHS Poverty Guidelines for Household of Two $17,420
Discretionary Income $73,870
10% of Discretionary Income $7,387
Pay As You Earn Monthly Payment $615.58
Now, let’s say that you and your spouse each owe $40,000 in federal student loans for a combined total debt of $80,000. Stated differently, you each owe half (50%) of the combined federal student loan debt. Divide your PAYE monthly payment in half. Now, you pay $224.46 instead.

Pay As You Earn (PAYE) Plan
Combined Income Same Salaries
Your Income $40,000
Your Spouse’s Income $0,000
Combined Income $80,000
2021 HHS Poverty Guidelines for Household of Two $17,420
Discretionary Income (Note: 2021 HHS Poverty Guideline is $17, 420) $53,870
10% of Discretionary Income $5,387
Pay As You Earn Monthly Payment $448.92
Each Person Pays 50% of Monthly Payment $224.46
If your spouse independently applies for the PAYE (which he or she would have to do to enroll), your spouse will pay $224.46 per month. If your spouse chooses a different repayment plan, his or her payment may differ, but it will not affect your calculated payment of $224.46.

Now I hear you saying: “But what if my spouse doesn’t have federal student loans?” Well, under the combined income, different salaries example, that $615.58 would be your payment because you owe 100% of the combined federal student loan debt.

If $615.58 isn’t affordable and you’re interested in an IDR plan, the Revised Pay as You Earn (REPAYE), PAYE, Income-Based Repayment (IBR), or Income-Contingent Repayment (ICR) plans, you can file separately from your spouse.

If you file a separate income tax return from your spouse, your payment only considers your income of $40,000. Under PAYE, you would pay $115.58 per month.

Pay As You Earn (PAYE) Plan
Your Income
Your Income $40,000
2021 HHS Poverty Guidelines for Household of Two $17,420
Discretionary Income (Note: 2021 HHS Poverty Guideline is $17, 420) $13,870
10% of Discretionary Income $1,387
Pay As You Earn Monthly Payment $115.58
In conclusion, if you file a joint income tax return with your spouse or choose REPAYE, we will use your combined income to calculate your IDR payment.

Consult a tax or financial advisor before making any major decisions regarding your repayment plan.
If it seems like your combined income is a disadvantage, you can file a separate personal income tax return to ensure that only your income determines your payment. However, before you choose that option, you should consult a tax professional and consider your total financial situation.

That’s because filing taxes separately can make some IDR plans more affordable, but you could also pay more tax and lose benefits, including:

A more advantageous tax bracket
The student loan interest deduction
The childcare tax credit
The earned Income Tax Credit
It is often difficult to figure out whether the tax benefits you lose are worth the money you may save on your monthly payment, so ask for professional advice from a tax or financial advisor.

Marriage will change your life in many ways, including your financial future. As you combine and plan your finances, make sure to have a conversation about student loan debt. This talk is especially important if either you or your spouse has student loan obligations or plans to go back to school. Student loan debt can affect current money matters like your credit history, credit score, and discretionary income, as well as your future goals.

Ian Foss is a Program Specialist at the U.S. Department of Education’s office of Federal Student Aid.

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