Newlyweds have many goals — buying a home, starting a family and saving for a comfortable retirement are just a few. However, many young couples are entering marriage with student loan debt, which they need to learn to manage together as they plan for the future.
While it may seem challenging, balancing student loans and other financial needs after marriage can be done — but it's important to know your options, outline your goals as a couple and create a solid plan to achieve those goals.
The guide below will give you a framework for tackling student loan debt with your spouse which will help you be better prepared for future financial goals, such as applying for a mortgage, saving for retirement and saving for your children's education.
Tips for managing your student loans together after marriage
Once you're married, you and your spouse will need to work together to maintain your new family's finances. Whether one or both of you is repaying student loan debt, it's important to create a plan to address your loans and pay them down effectively. Consider these steps to get started:
- Gather information about your individual student loans: To properly address the total student loan debt between you and your spouse, you'll need to make sure you know the terms and conditions of your student loans as well as how much you still owe. Review your federal student loan portfolio at the National Student Loan Data Center and check the master promissory notes and student loan statements for any of your private student loans. You may also want to get a copy of your credit report to ensure your student loans are appropriately reported.
- Talk about your student loan debt together: Being honest about your finances is important for a strong marriage, and student loans are no exception. When talking to your spouse about your college loans, clearly outline what you owe, how much you're currently paying and when you expect to pay your debt off. Setting a baseline will make it easier to develop a plan for paying down your student loans together.
- Revisit student loan repayment options: You've likely been making student loan payments on your own for a few years, but now that you're married you will need to manage the loans of two individuals from one household budget. It may make sense to re-evaluate your repayment options - especially if you were taking advantage of income-based repayment, forbearance or deferment based on your previous situation. If you're concerned with your ability to repay your total loans as a couple, speak to your loan servicer(s).
- Find out if you qualify for federal loan forgiveness: If you or your spouse have federal loans and work in the public sector, you may have the option to lower your monthly payments or the total amount you owe. Review federal student loan forgiveness programs to see if you or your spouse would qualify.
- Be aware of tax implications: Consult a certified tax professional about filing taxes jointly or separately, as this can affect both student loan tax credits and monthly payment amounts. When you file jointly, for example, your income will be combined with your spouse's incomes for tax purposes. If you are currently using an Income-Driven Repayment plan offered by the federal government, this could cause your monthly payments to increase substantially. However, there are several tax credits you will not be able to take advantage of if you file separately.
- Determine whether consolidating or refinancing your student loans could be beneficial: If you're looking for ways to simplify repayment, you may be wondering, "Can married couples consolidate student loans together?" Unfortunately it is no longer possible to consolidate your federal or private student loans with your spouse's loans. However, there are some private student loans available that provide the option of refinancing or consolidating individual federal and private student loans.
A private student loan refinance or consolidation would allow you each to turn the loans in your name into a new loan with new terms and potentially lower interest rates. Your loans would still need to be considered separately, but this could simplify your monthly payments by reducing the total number of loans you need to manage and possibly lower each of your individual monthly loan payments. There are many refinancing benefits worth considering.
- Revise your repayment plan: After you have reviewed your loans and repayment options, it's time to outline a plan for paying down your student loan debt together. Decide how you and your spouse would like to handle payments (either separately or from a joint account) and whether or not you would like make student loan prepayment a priority in your household budget. Some couples may wish to make the minimum payments and build up retirement savings with supplemental funds, while others prefer to pay down all debt before taking on more. As long as you are making regular on-time payments, how you structure the rest of your budget is up to you.
We are committed to helping you reach your potential. To learn more about how refinancing your student loans could help you reach your saving goals, check out our refinance calculator, call 866-999-0142 to speak with one of our Student Lending Specialists, or visit your nearest Citizens Bank branch.