Odds are, you or your partner entered your relationship with major debt. More than 44 million Americans carry student loan debt, and the average 2016 grad left school owing a whopping $37,172.
As difficult as it is to pay off your own debt, things get tougher when you’re a couple who both bring debt to the table. Check out how these three couples dealt with their student loans as a team, and see if their strategies could help you and your partner manage your own loans.
1. The Gutierrezes stayed motivated by scoring quick wins
Javier Gutierrez, founder of Dreamer Money, worked together with his wife, Taylor, to repay more than $34,000 in debt, including $15,000 in student loans.
The couple budgeted loan payments into their regular monthly expenses, making a payoff plan together and discussing their loans as part of their bigger financial goals and dreams.
The process was easier for the couple because they came into the marriage knowing what the other owed. “Bringing up the issue after marriage does not make it any easier,” Javier said. Open communication and working together to stay motivated were keys to their strategy.
Because the couple spoke openly about their debt, repaying was a joint goal. The duo decided to use their pooled income to target specific debt first. “It was cheaper and easier for us to do so,” Javier said.
Since they both had debt, they decided to tackle the loan with the lowest balance first — a tactic known as the debt snowball method. “We did this in order to get a quick win and gain traction,” Javier explained.
Because they’d combined their income, their monthly payments were bigger than they otherwise would have been. That allowed the couple to pay off loans quickly and score debt wins faster than if they’d divided their efforts.
Since they were more motivated as they saw their debt quickly disappearing, the plan worked and the couple repaid what they owed in less than two years.
2. The Schultzes tracked their spending together
Sam Schultz, co-founder of couples’ budgeting app Honeyfi, met his wife at University of Virginia School of Law 10 years ago. Both he and his wife graduated with substantial student loans, and the couple talked about their debt while dating. Though each knew what the other owed, they handled repayment separately.
But after getting engaged, things changed. “We discussed our loans in more detail, and actually created a budget to help us pay down our loans more aggressively,” Sam said.
Ultimately, they decided to combine their incomes and work on repayment after tying the knot.
“We’ve pooled our income, and based on what we expect to spend, we’ve agreed on a single amount to pay each month toward both of our loans,” Sam said. “Then, we track our actual spending each month against our expected spending. When we spend less than we projected, we increase our loan payment for the next month.”
Sam believes joining forces with his wife has made a big difference in how successful the couple has been on repayment.
“Talk to your partner about your loans and track your progress together,” he advised. “By getting your partner involved, you have a sounding board and support system to help you keep hitting your targets and stay positive about your progress.”
Since the couple had been discussing their loans in detail since getting engaged, they were immediately able to start working together once they tied the knot. They could keep each other motivated and committed to sticking to their budget. Open communication and support were instrumental in helping them stay on track.
3. The Masters pooled their income to pay less in interest
Amber and Danny Masters earned bachelor’s degrees with almost no debt, graduating with only a $3,500 loan from Amber’s last semester.
But things changed when Amber took out law school loans and Danny borrowed for both a graduate degree and an expensive dental school. The pair ended up owing more than $600,000 in student loan debt.
The couple, who blog about their experience at Deeply in Debt, got right to work.
Amber graduated first, so they pooled their income and started repaying her loans. By combining their income, they could afford to make higher monthly payments, helping them pay off the higher-interest loans faster.
“We started by paying off the highest-interest loans first and working our way down to the lower interest ones,” Amber said. “We tackled my loans first since they were due first, and then moved on to his.”
This strategy, known as the debt avalanche method, saves borrowers money by reducing the amount of interest that must be paid on a loan.
Amber’s loans were repaid within 18 months, thanks to the fact the couple joined forces to make bigger payments on her loans.
The pair then started making payments on Danny’s student loans, which he refinanced to reduce the “crazy high interest.” They’ve paid off around $100,000 of his debt so far by working together, living on a budget, and earning extra income from side hustles.
“You have to educate yourself so that you know what student loan repayment option is best for you,” Amber said. “You might find Public Service Loan Forgiveness is best, or maybe one of the income-driven repayment plans. Or, you might be like us and find paying off your loans as aggressively as you can is most appealing.”
“The point is, it’s not up to anyone else but you to figure out what is best,” she said. “You have to literally own your student loan debt, decide what you will do with it, and work together as a couple to make it happen.”
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1 Important Disclosures for SoFi.
2 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.54% APR (with Auto Pay) to 7.27% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of March 18, 2019, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 0318/2019. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at firstname.lastname@example.org, or call 888-601-2801 for more information on ourstudent loan refinance product.
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3 Important Disclosures for Laurel Road.
Laurel Road Disclosures
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the fixed rate will decrease by 0.25%, and will increase back up to the regular fixed interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.5% effective February 10, 2019.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.54% – 7.12%3||Undergrad & Graduate|
|2.54% – 7.27%1||Undergrad & Graduate|
|2.67% – 8.96%4||Undergrad & Graduate|
|3.23% – 6.65%2||Undergrad & Graduate|
|2.54% – 7.43%5||Undergrad & Graduate|
|2.98% – 9.72%6||Undergrad & Graduate|