Getting engaged and planning a wedding is one of the biggest steps a couple can take together. But between cake tastings, venue tours, and honeymoon research, consider tackling a decidedly less-fun task: Have an honest talk about your student loan debt.
After all, there’s a good chance you or your future spouse are among the 44.2 million Americans with student loan debt. If you are, now’s the time to have the talk about finances, if you haven’t already.
“Often when people are in the blissful, early stages of their relationship, the last thing they want to do is talk about money or debt,” said Heidi McBain, a licensed marriage and family therapist. “But if it’s not discussed openly from the start, this can cause major stress in their marriage later on.”
To make the discussion easier, follow these seven steps recommended by money and relationship experts.
1. Schedule time for a state of the union discussion
Having the money talk can be tense, so don’t spring the conversation on your partner.
Instead, Caitlin Bergstein, a Boston-based matchmaker with Three Day Rule, recommended setting aside time to talk. “You can say something as simple as, ‘Let’s sit down and talk about our student loan info on Saturday afternoon so we can start to put together a plan.’ This way, you’ll both be prepared for the conversation, which will make it more productive.”
If this sounds awkward, ease into the discussion instead.
“Try starting with a conversation about your financial goals,” suggested Sam Schultz, co-founder and CEO of Honeyfi, a free app that helps couples manage money. “Compared to student loans, goals can be a more positive and fun way to start talking about money. Once you get a financial dialogue going, it’s easier to naturally get into conversations like spending habits and student debt.”
2. Put it all out there
Open up your money conversation with the goal of understanding your partner’s general financial outlook, rather than diving right into details, recommended Wilson Muscadin, a certified financial educator and founder of The Money Speakeasy.
“Personal finances are much more about behavior and mindset than dollars and cents,” he said. This means tackling questions such as whether your partner talked about money with their parents growing up, and how comfortable your partner is with carrying debt.
Schultz also recommended a big-picture approach, addressing issues such as current monthly spending and financial goals. “As part of that discussion, you should dig into your student loans,” he said. When you do, there are a few key questions to address:
- What do you owe?
- What’s the interest rate?
- What’s the minimum payment?
- When do you expect the loans to be repaid?
While focusing on debt might seem like a downer, you’re setting a solid foundation for your future. “These conversations are hard, but if you start doing them at the beginning of your relationship, this will create a positive environment where you can have these conversations later on in marriage,” said McBain.
3. Set financial goals together
Since you’re building a future with your partner, focus not just on your current money situation but also on what you hope to accomplish.
“Figure out what your priorities are as a couple,” Bergstein advised. “Would you rather save up to pay off your student loan debt or is it more important that you take a big trip each year, have a big wedding, or put a down payment on a house?”
If your answers to these questions are different, keep talking until you find a compromise. “Both partners have to be on the same page financially,” stressed Muscadin. This doesn’t mean you must agree on everything or nail down every detail, but you should reach a consensus on a broad framework for handling money.
4. Decide if loan repayment will be a joint project
As you consider your debt payoff plan and other goals, there’s one big question to answer: How much of your financial lives will you combine?
“If you’re keeping bank accounts separate, that probably means you’ll each use your individual income to pay for your own student loans,” Schultz explained. “If you’re combining finances, that probably means you’re using your combined income to pay for both of your student loans. Make sure you’re both comfortable with that.”
Of course, even with separate accounts, your partner’s debt and spending habits affect things you do as a couple, such as buying a house or starting a family. “Regardless of who incurred the debt, as a married couple, you both own it,” Muscadin said.
Even if your bank accounts won’t have both your names on them, debt repayment must be a team goal.
5. Choose the right student loan repayment options
When discussing student loans, make sure you’ve chosen repayment plans that make sense.
“There are a ton of repayment options out there, some of which can significantly lower your payment or interest rate,” Bergstein advised. For example, income-driven repayment plans can lower the amount you must pay toward loans each month. But marriage could change the amount you pay monthly if your combined income is counted.
Bergstein also advised couples to find out if either spouse is eligible for loan forgiveness for qualifying public service work, and to look into refinancing student loans if your current interest rates are high.
6. Set a budget that addresses debt repayment
Once you’ve got a broad idea of how you’ll handle your cash, it’s time to get into the nitty-gritty details. That means creating a budget.
“For most couples, creating a budget isn’t a fun activity,” Schultz said. “But crunching the numbers is crucial. It makes you more likely to actually align on money and avoid big, unpleasant surprises after you get married.”
Schultz explained this process is important, even if you’ll be keeping separate finances. “It will help you understand your partner’s financial stressors and concerns, and you’ll also be able to use each other as a sounding board for important financial decisions,” he said.
7. Schedule regular money meetings
Once you’ve tackled the tough issue of student debt and are ready to walk down the aisle, set a plan for money management in the future. To make sure this process goes smoothly, Muscadin recommended scheduling monthly money dates.
“Sit down with your partner monthly to check in on your financial progress, budget, and look forward,” he advised. These meetings allow you to make adjustments to your payment plan, tweak your budget, and set new goals as life changes.
Finally, and perhaps most importantly, Muscadin recommended you celebrate your wins, no matter how small. When you work together to accomplish your goals, you can do anything — even pay off lots of student loan debt.
Interested in refinancing student loans?Here are the top 6 lenders of 2020!
|Lender||Variable APR||Eligible Degrees|
|1.89% – 6.66%1||Undergrad & Graduate|
|1.89% – 5.90%2||Undergrad & Graduate|
|2.25% – 6.09%3||Undergrad & Graduate|
|1.99% – 5.34%4||Undergrad & Graduate|
|1.97% – 8.54%5||Undergrad & Graduate|
|2.39% – 6.01%||Undergrad |
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1 Important Disclosures for Splash Financial.
Splash Financial Disclosures
Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers. If approved, your actual rate will be within a range of rates and will depend on a variety of factors, including term of loan, a responsible financial history, income and other factors. Refinancing or consolidating private and federal student loans may not be the right decision for everyone. Federal loans carry special benefits not available for loans made through Splash Financial, for example, public service loan forgiveness and economic hardship programs, fee waivers and rebates on the principal, which may not be accessible to you after you refinance. The rates displayed may include a 0.25% autopay discount.
The information you provide to us is an inquiry to determine whether we or our lenders can make a loan offer that meets your needs. If we or any of our lending partners has an available loan offer for you, you will be invited to submit a loan application to the lender for its review. We do not guarantee that you will receive any loan offers or that your loan application will be approved. Offers are subject to credit approval and are available only to U.S. citizens or permanent residents who meet applicable underwriting requirements. Not all borrowers will receive the lowest rates, which are available to the most qualified borrowers. Participating lenders, rates and terms are subject to change at any time without notice.
To check the rates and terms you qualify for, Splash Financial conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Splash Financial and our lending partners reserve the right to modify or discontinue products and benefits at any time without notice. To qualify, a borrower must be a U.S. citizen and meet our lending partner’s underwriting requirements. Lowest rates are reserved for the highest qualified borrowers. This information is current as of October 1, 2020.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
All credit products are subject to credit approval.
Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.
As used throughout these Terms & Conditions, the term “Lender” refers to KeyBank National Association and its affiliates, agents, guaranty insurers, investors, assigns, and successors in interest.
Assumptions: Repayment examples above assume a loan amount of $10,000 with repayment beginning immediately following disbursement. Repayment examples do not include the 0.25% AutoPay Discount.
Annual Percentage Rate (“APR”): This term represents the actual cost of financing to the borrower over the life of the loan expressed as a yearly rate.
Interest Rate: A simple annual rate that is applied to an unpaid balance.
Variable Rates: The current index for variable rate loans is derived from the one-month London Interbank Offered Rate (“LIBOR”) and changes in the LIBOR index may cause your monthly payment to increase. Borrowers who take out a term of 5, 7, or 10 years will have a maximum interest rate of 9%, those who take out a 15 or 20-year variable loan will have a maximum interest rate of 10%.
KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.
This information is current as of December 1, 2020. Information and rates are subject to change without notice.
3 Important Disclosures for SoFi.
4 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 2.98% APR (with Auto Pay) to 5.49% APR (with Auto Pay). Variable rate loan rates range from 1.99% APR (with Auto Pay) to 5.34% 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 October 26, 2020, 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 10/26/2020. 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 [email protected], or call 888-601-2801 for more information on our student loan refinance product.
© 2020 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
5 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.
Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of 5 years and is reserved for applicants with FICO scores of at least 810.
As of 11/13/2020 student loan refinancing rates range from 1.97% to 8.54% Variable APR with AutoPay and 2.95% to 8.77% Fixed APR with AutoPay.