Student debt likely isn’t a hot topic when you’re making wedding plans, but student loans can have a significant impact on your finances — and your relationship — after you get married.
Students loans for married vs. single people are a completely different story, and if you’re considering walking down the aisle soon, you may want to have a conversation with your spouse-to-be about student loan debt sooner than later. A 2018 Fidelity Investments study about couples and money found that more than half of married couples brought debt into their relationship, and of those couples, about 40% of the respondents said it had a negative impact.
Does getting married vs. staying single affect student loans?
In many situations, the answer is yes. Here’s how student loans can impact those who are married vs. single.
1. Increased payments under some income-driven plans
If you’re single and on an income-driven repayment plan, your payments are based on your income. But let’s say your future spouse is a high earner and you are not. If you file your federal income taxes jointly after you tie the knot, your cumulative income (yours and your spouse’s) could be used to determine your monthly payment amount under the following plans:
- Pay As You Earn (PAYE)
- Revised Pay As You Earn (REPAYE)
- Income-Based Repayment (IBR)
- Income-Contingent Repayment (ICR)
If both you and your spouse have federal loans, then your individual payments will be proportional to the total amount you and your spouse owe. However, they won’t be proportional to your individual incomes. Additionally, other personal debts — including private student loans — aren’t a factor in determining monthly payments for federal plans.
If your cumulative income is high enough that you no longer meet the income requirements for IDR plans, then your monthly payments could rise to what they would have been under the standard repayment plan (for PAYE and IBR) or potentially even higher (for REPAYE or ICR).
Particularly if one or both of you were holding out for student loan forgiveness, that’s a pretty big wrench to throw in the works.
2. Married filing separately doesn’t always help with student loans
Okay, so filing federal income taxes jointly clearly makes student loans and marriage complicated. No sweat — you’ll just file separately, right? Unfortunately, married filing separately doesn’t always help. Under REPAYE, for instance, your cumulative income will be used to determine your monthly payment amount even if you file your federal income taxes separately.
There’s also another issue with filing your taxes separately if you’re married, and it has to do with a tax form called the 1098-E. If you meet the income requirements, then you can take an above-the-line deduction if you paid at least $600 in student loan interest, reducing your taxable income by that amount. However, if you are married and file your taxes separately, then you can’t take the student loan interest deduction — even if you meet the income requirements.
That may put many married couples in the position of deciding whether to file separately to minimize payments under some income-driven plans or whether to file jointly to take advantage of federal income tax deductions. Again, if you’re on the REPAYE plan, you can’t use the married filing separately loophole at all.
3. Other financial issues may rise to the surface
Getting married means you’ve decided you’re ready to start a new phase in your life. For many couples (though not all), that means lifestyle changes that have a major financial impact: Buying a house, having children, caring for aging parents, etc. — and that’s not to mention the cost of the wedding itself.
Student loan debt, unfortunately, can be a big factor in these decisions. In some cases, people have postponed wedding plans because they were afraid of sharing the responsibility of their partner’s student loans.
Student loan debt is also causing many millennials to put off having kids. If one or both partners are paying off a lot of student loan debt, they can’t contribute as much toward household expenses or bigger goals, such as saving for their child’s college education or a family vacation.
Plus, while it is possible to obtain a mortgage with student loan debt, it certainly makes the situation more complicated. Banks consider debt-to-income ratio (a measurement of how much of your income goes toward debt payments each month) when deciding whether to approve a mortgage application, and they are unlikely to take a risk on applicants with a lot of student debt. When couples strapped with college loans can’t qualify for a mortgage, they often put off buying a home and continue to rent — or worse, are forced to move in with roommates or parents.
Even if you’re able to accomplish these life goals with your debt, it can be frustrating and stressful to juggle so many financial responsibilities simultaneously. It’s not easy to enjoy reaching life’s milestones when you feel like your monetary situation is hanging by a thread.
So what are your other options if you’re going to balance student loans and marriage?
How to make student loans and marriage work
If you have federal loans, then a direct consolidation loan may make your monthly student loan payments more manageable. Additionally, since the new loan is also a federal loan, you’re still eligible for benefits like income-driven repayment plans, deferment and forbearance if you meet the qualifications.
However, you can’t lower your interest rates through consolidation. To do that, you may want to consider refinancing. Whether your loans are federal, private, or a mix of the two, refinancing with a private lender may help you lower your payments and your interest rate simultaneously.
Just remember the following:
- Refinancing a federal loan with a private lender means giving up federal benefits — permanently.
- Refinancing or consolidation may lower your monthly payments by lengthening your repayment term. That means you’ll be making payments longer and may pay more in interest over time, especially if you’re unable to lower your interest rate.
- If you and your (future) spouse both have student loan debt and are going the consolidation route, you can’t combine each other’s debt into one loan. Ditto if you’re refinancing with a private company. If you accrued the student loan debt prior to your marriage, it stays separate.
Following your heart is important, and no one is telling you that you should delay marriage because of student loan debt (though you may want to). However, you should crunch all the numbers and consider all of the options available to you before your wedding day. That way, you can be sure that you’re starting your new lives together on the firmest financial footing possible.
Marty Minchin contributed to this report.
Interested in refinancing student loans?Here are the top 9 lenders of 2021!
|Lender||Variable APR||Eligible Degrees|
|1.88% – 6.15%1||Undergrad & Graduate|
|1.88% – 5.64%2||Undergrad & Graduate|
|2.50% – 6.85%3||Undergrad & Graduate|
|1.89% – 5.90%4||Undergrad & Graduate|
|1.99% – 6.59%5||Undergrad & Graduate|
|1.88% – 5.64%6||Undergrad & Graduate|
|1.90% – 5.25%7||Undergrad & Graduate|
|2.39% – 6.01%||Undergrad |
|2.13% – 5.25%8||Undergrad & Graduate|
|Check out the testimonials and our in-depth reviews!
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 June 1, 2021.
2 Rate range above includes optional 0.25% Auto Pay discount. Important Disclosures for Earnest.
Interest Rate Disclosure
Actual rate and available repayment terms will vary based on your income. Fixed rates range from 2.48% APR to 5.79% APR (excludes 0.25% Auto Pay discount). Variable rates range from 1.88% APR to 5.64% APR (excludes 0.25% Auto Pay discount). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 36% (the maximum allowable for these loans). Earnest variable interest rate student loan refinance 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 2.04% and 5.8% to the one month LIBOR. Earnest rate ranges are current as of 6/8/2021, and are subject to change based on market conditions.
Auto Pay Discount Disclosure
You can take advantage of the Auto Pay interest rate reduction by setting up and maintaining active and automatic ACH withdrawal of your loan payment. The interest rate reduction for Auto Pay will be available only while your loan is enrolled in Auto Pay. Interest rate incentives for utilizing Auto Pay may not be combined with certain private student loan repayment programs that also offer an interest rate reduction. For multi-party loans, only one party may enroll in Auto Pay.
Student Loan Refinancing Loan Cost Examples
These examples provide estimates based on payments beginning immediately upon loan disbursement. Variable APR: A $10,000 loan with a 20-year term (240 monthly payments of $72) and a 5.89% APR would result in a total estimated payment amount of $17,042.39. For a variable loan, after your starting rate is set, your rate will then vary with the market. Fixed APR: A $10,000 loan with a 20-year term (240 monthly payments of $72) and a 6.04% APR would result in a total estimated payment amount of $17,249.77. Your actual repayment terms may vary.Terms and Conditions apply. Visit https://www.earnest. com/terms-of-service, e-mail us at [email protected], or call 888-601-2801 for more information on our student loan refinance product.
Earnest Loans are made by Earnest Operations LLC or One American Bank, Member FDIC. Earnest Operations LLC, NMLS #1204917. 535 Mission St., Suite 1663, San Francisco, CA 94105. California Financing Law License 6054788. Visit earnest.com/licenses for a full list of licensed states. For California residents (Student Loan Refinance Only): Loans will be arranged or made pursuant to a California Financing Law License.
One American Bank, 515 S. Minnesota Ave, Sioux Falls, SD 57104. Earnest loans are serviced by Earnest Operations LLC with support from Navient Solutions LLC (NMLS #212430). One American Bank and Earnest LLC and its subsidiaries are not sponsored by or agencies of the United States of America.
© 2021 Earnest LLC. All rights reserved.
3 Important Disclosures for CommonBond.
Offered terms are subject to change and state law restriction. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900), NMLS Consumer Access. 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 0.15% effective Jan 1, 2021 and may increase after consummation.
4 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 April 29, 2021. Information and rates are subject to change without notice.
5 Important Disclosures for SoFi.
Fixed rates from 2.49% APR to 6.94% APR (with autopay). Variable rates from 1.99% APR to 6.59% APR (with autopay). All variable rates are based on the 1-month LIBOR and may increase after consummation if LIBOR increases; see more at SoFi.com/legal/#1. If approved for a loan your rate will depend on a variety of factors such as your credit profile, your application and your selected loan terms. Your rate will be within the ranges of rates listed above. Lowest rates reserved for the most creditworthy borrowers. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi loans are originated by SoFi Lending Corp. or an affiliate (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license #6054612; NMLS #1121636 (www.nmlsconsumeraccess.org). Additional terms and conditions apply; see SoFi.com/eligibility for details. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.
6 Important Disclosures for Navient.
7 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 04/07/2021 student loan refinancing rates range from 1.90% APR – 5.25% Variable APR with AutoPay and 2.49% APR – 7.75% Fixed APR with AutoPay.
8 Important Disclosures for PenFed.
Annual Percentage Rate (APR) is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Fixed Rates range from 2.89%-4.78% APR and Variable Rates range from 2.13%-5.25% APR. Both Fixed and Variable Rates will vary based on application terms, level of degree and presence of a co-signer. These rates are subject to additional terms and conditions and rates are subject to change at any time without notice. For Variable Rate student loans, the rate will never exceed 9.00% for 5 year and 8 year loans and 10.00% for 12 and 15 years loans (the maximum allowable for this loan). Minimum variable rate will be 2.00%. These rates are subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.