Bells will be ringing — your fiancé proposed and you said “yes!”
But before you follow up with an “I do,” consider this: If one (or both) of you brings student loan debt into the relationship, you’ll have to decide if you should tie the knot now or wait until that debt is repaid.
I know, I know. Waiting until you’ve repaid your student loan debt might seem unnecessary. Why delay your future as a couple?
Unfortunately, changing your status from single to married could have lasting implications on your financial situation if student loan debt is involved. Before you walk down the aisle, weigh the pros and cons of getting married now versus waiting until you’re free from student loan debt.
Student Loan Debt and Marriage
Does one partner carry much more debt than the other? This may become a point of contention in your marriage.
If one of you racked up $100,00 in student debt while pursuing a Ph.D., for example, but the other paid their way through college, the debt-free spouse might want to wait to enter into a marriage. In the beginning, the debt-free (or low-debt) spouse might we willing to ignore it — they’re in love, after all. They might even want to help their partner repay their loans.
But large and unequal student debts are a heavy financial responsibility and the day-to-day reality could become draining.
Both partners will need to live in a smaller home, skip restaurants and vacations, and work overtime. Will the debt-free person be okay with this frugal lifestyle? Or will he or she feel like their own financial goals are being held back?
Who’s Going to Pay?
When it comes to the matter of tackling this debt, there are several options. Should the spouse with the higher income contribute larger chunks of money? Should the spouse who acquired the debt pay more? Or should you both pay equally?
If you and your partner take the plunge into shared banking and finances, you’ll need to have a conversation about whether or not student loans will become a shared debt. You’ll also need to decide how much each spouse will contribute if you do decide to share the responsibility.
For the sake of a harmonious marriage, make those decisions before the ceremony.
Perhaps you’re not done with higher education. If you both want to continue your education with professional or grad school, who will get to earn their degree first? Will you both defer your undergraduate loans and live entirely off of your new loans? One of you may need to work to support the family.
If you decide to pursue school, will you both save up as much as possible before continuing on with graduate school? Or should you skip graduate degree debt altogether in favor of starting your career and family life?
You and your future spouse need to factor not just for your current student loans, but also any future student loans you might incur.
Income-Based Repayment Plans
Perhaps the most serious implication of student loan debt and marriage is the drastic effect it can have on income-based repayment plans.
For instance, your qualification for an IBR plan is based on based on discretionary income. Once you and your spouse combine incomes, your new discretionary income might be too high. To avoid this, you would need to file taxes separately.
For REPAYE, your spouse’s income is considered even if you two file separately. If marriage makes you ineligible for this program, you might have to consider an Income-Contingent Repayment (ICR) plan instead, which holds a higher qualification threshold and capitalizes interest annually.
Marrying Someone With Debt: Benefits of Waiting
The average wedding now costs $31,213 , according to The Knot. Even the most frugal wedding can run several thousand dollars, which is money you could devote to becoming debt-free instead.
The promise of a wedding is excellent motivation to pay off your debt. If you postpone getting married, you can restructure your repayment schedule to pay off larger amounts more quickly. Plus, you’ll be able to splurge more on the ceremony and reception.
Bottom Line? Make the Decision as a Couple
It’s time for you and your fiancé to have a serious conversation.
Don’t let the financial elephant in the room build resentment between you and your fiancé. Talking about finances can be uncomfortable, but remember that your union will be decidedly less perfect, and a lot less harmonious, if the topic of student debt is swept under the rug.
Discuss the timeline for debt repayment. Talk about whose burden it will be to bear. Learn to communicate effectively with your partner about finances before you’re legally bound. Most importantly, be open and honest with your partner before walking down the aisle.
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