How to Combine Your Student Loan Debt With Your Spouse’s

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Updated on Thursday, November 15, 2018

While marriage is a union between two people, it can also become a union between two financial situations, as the couple shares expenses and typically opens joint bank accounts and credit cards together. Many newlyweds (and many of those soon-to-be-wedded) also wonder: Can they combine student loans with their spouse?

It might sound attractive to consolidate student loans with your loved one and combine all educational debt. In reality, combining student debt with your spouse might not be that easy or simple.

Here’s what you need to know about how marriage affects student debt and whether combining student loans is possible.

Dealing with student debt after marriage

Starting a marriage with student debt is common enough these days, given that about 44 million Americans have a student loan. But how you and your partner choose to handle any student loans is up to you — mostly.

There are a few legal changes to student debt that kick in as soon as you say “I do.” Here are some of the ways that getting married can affect student debt.

Student debt from before the wedding: Usually, any debt that predates your marriage will be individually owned, and repaying it remains the sole responsibility of the person who holds it.

Student loans borrowed while married: In most states, student loans taken out after the wedding day would still be the sole responsibility of the one borrowing them. However, in states with community property laws for married couples, student loans borrowed during a marriage might be considered shared property, for which the couple is collectively responsible.

Student loans enrolled in income-driven repayment: These repayment plans use your income to set affordable monthly payments for your federal student loans. If you get married, this could change what you pay — depending on how you choose to file your taxes.

File jointly, and your payments will be based on your joint incomes and how much you owe together on federal student loans. File separately, and payments will be based on your individual income and student loan balance.

Student loan interest deduction: Spouses who file taxes separately will be ineligible to claim the student loan interest deduction (as well as some other tax benefits), which allows you to reduce your taxable income by interest paid on student debt.

On top of these formal changes to your student loans, payments and tax situation, you and your spouse will also want to discuss whether you’ll share responsibility for repaying student debt, and if so, how.

Start the conversation well before your wedding day, and keep communication open throughout your marriage, to make sure you’re on the same page about student loans. Talking about these issues can help them from causing or contributing to marital conflicts.

Can you consolidate student loans with a spouse?

If you decide to tackle your college debt together, you might want to consolidate student loans with your spouse. Student loan consolidation is any process that combines multiple student loans into a single, new student loan.

The two main options for consolidating student loans are a direct consolidation loan, which combines federal student loans, or private student loan refinancing, which can consolidate private or federal student debt.

Here’s a look at each option, with an eye toward which one is best to combine student loans with a spouse.

Not a solution: Couples can’t use direct consolidation loans to combine student loans

Previously, the Federal Student Aid Office did offer a way for spouses to combine student loans: the federal joint or spousal consolidation loan. This program ended in 2006, since then there has been no federal option for married couples to jointly consolidate their federal student loans.

Still, while you can’t use a direct consolidation loan to formally combine student debt with a spouse, it could still be worth considering as an option to simplify your own student loans.

Potential solution: Some private lenders can consolidate spouse student loans

While a federal direct consolidation loan is out of the question, it is possible to combine student loans with a spouse by refinancing with a private lender. Such joint student loan refinancing loans are very rare, however.

One major lender that does offer this option is PenFed Credit Union, where couple can apply together to have their combined student loans refinanced. The application is processed using your and your spouse’s combined income, and rates are set by whichever credit score is higher. Refinance rates started at 2.25% APR for variable-rate loans or 2.99% APR for fixed-rate loans.

Most likely solution: Consider cosigning a spouse’s student loan refinance

A more accessible option might be to refinance one person’s student loans and add the spouse as a cosigner. This move won’t combine your student debt with your spouse’s, but it provides some other benefits.

The lender will consider both your income and your spouse’s income when processing your application. This can improve your chances of getting approved if you earn far less than your spouse or have no income — for example, if you’re a stay-at-home parent.

If you have poor credit but your spouse has a higher credit score, adding them as a cosigner can also help you qualify to refinance student loans. In fact, lenders like Citizens Bank will not only allow you to add a cosigner, but will set your student loan refinance rate based on whoever’s credit score is higher.

If you’re interested in this option, make sure to shop around to find good rates and terms for your student refinance loan. And be careful when refinancing federal debt, as you will lose access to certain government programs, such as income-driven repayment and Public Service Loan Forgiveness.

Is combining student loans with your spouse a good idea?

Married couples do have a few options to legally share responsibility for their student loans, but they should carefully evaluate whether it’s a good idea.

It might be smart to refinance student loans together, for example, if it could mean getting a much lower student loan rate — which could save hundreds or even thousands in interest charges over the life of the loan. Consolidating debt with a spouse might also seem like a smart way to simplify your student debt and manage it more easily.

However, there are some potential drawbacks to weigh. The first is whether it’s wise to mix responsibility for student loans, especially if they were taken out before you got married. If you consolidate student loans together or cosign to refinance your spouse’s student loans, both parties then become equally responsible for repaying this debt — no matter what. Even in the case of divorce, you’ll still be on the hook for any student loan you consolidated or cosigned with your former spouse.

In fact, you could be liable for repaying any student loans taken out after you get married. This could include any refinance student loan or direct consolidation loan that originates after your wedding date. Since these are new student loans that replace the old student loans, they could be considered community property — and you might be responsible for repaying a portion of them whether your name is on them or not.

Ultimately, though, combining student debt with a spouse doesn’t have to require more than an informal agreement between the two of you. Any couple can discuss their student debt repayment goals and how they can work together to achieve those. You don’t have to officially meld your student loans into one or have both your names on a loan in order to work as a team to manage and pay off this debt.

You and your spouse’s student loans are already part of your joint financial situation, both in the present and in the future. If you can handle your other financial issues together, the student debt shouldn’t be a problem, regardless of whose name or names are on which loans.