How to Handle Student Debt Before Marriage
Student debt and marriage do not have to be mutually exclusive. Because about 70% of students graduate with debt, either you, your spouse or both of you are probably carrying student debt into your marriage.
However, it is critical to know the influence that debt may have when you are ready to marry. Whether you like it or not, marrying someone who has student loan debt has an influence on your financial future and personal finances as a pair.
It may be challenging to manage your student loan debt if you both have a lot of it. Higher student loan payments will have an impact on the budget you create together.
This may also have an impact on future financial milestones like purchasing a home, purchasing a new automobile, or having a family.
Whatever your financial condition, you’ll need to work together to solve it, and it’s preferable to pay off student debt before the wedding so that finances do not quarrel with you or lead you into a bankruptcy situation where you will need to get $50 instantly to cover basic expenses.
Working together is an important part of dealing with student debt and marriage correctly. It’s important to devise a strategy to get ahead of your debt; it’ll make your life simpler in the long run.
Is a Spouse Liable for Student Loan Payments?
Debt incurred before a couple’s marriage, including student loans, is considered “individual property” and is the exclusive responsibility of the spouse who acquired it. This debt cannot be forced onto the other spouse.
Another evident situation is if you and your partner co-signed college loans. It makes no difference whether you took out these loans before or after marriage, or whether you are the co-signer or sole borrower. You will both be equally liable for this student debt.
However, things might get more complicated if you or your spouse take out solo student debts after you’ve married.
The intricacies of who owns student debts taken out after marriage differs by the state since each has its own rules governing what is deemed common property.
If you live in a community property state, student debts obtained during the marriage, for example, may be deemed marital property with shared accountability.
Once you’re married, your credit history file or score will be unaffected by your partner’s debt or credit history.
So, if you have student loans, you don’t have to be concerned about them affecting your spouse’s credit history. These student debts will not be reported to your spouse’s credit bureau.
The only exception is if you and your spouse have any joint debts or accounts, such as co-signed college loans.
These jointly held debts, as well as payments on these loans, will be displayed on both of your credit reports in this situation.
Financial Difficulties May Be Detrimental to a Marriage
Financial difficulties continue to be a major cause of conflict between couples, whether married or not. Managing life together will be stressful no matter how much you love each other.
If your student debt is about $14,000, which is the minimum average public institution certification debt, then you and your significant other will find it relatively easy to pay off that debt if it’s the only one you have.
But if we take $36,000 for example, which is the average tuition debt for a bachelor’s degree in private universities, then getting married with this amount of debt will already be emotionally unpleasant.
It’s easy to understand why marrying someone with student loan debt puts you at a greater chance of marital problems. However, debt isn’t the only source of contention between you and your husband.
Each of your financial actions might cause friction, which you must address. If you are a saver and your spouse is a spender, you will have financial disputes.
The more difficulties you face over time, the bigger the influence on your marriage. As a result, it is essential to approach marriage with clean slates, free of debts and unwanted financial responsibilities and concerns.
Paying Off Student Debt Strategies
To pay off your debt faster, you can take into account a few tips below:
Prioritize High-Interest Debt First
Your spouse should prioritize paying off any higher-interest debt, including credit card balances, before making payments on their student loans.
Make Regular Payments, No Matter How Modest
Even if you just pay the minimum amount required, making regular payments can keep you in good standing with your loan business and may provide you power if you wish to negotiate your payments.
The quantity you pay is important, as it demonstrates that you are a regular and trustworthy client.
Consider Your Repayment Choices
Your spouse may choose to apply for a federal income-driven repayment plan, which establishes payments at a percentage of your income and lengthens the loan term if their student loan debt is so high that paying more or meeting regular commitments is difficult.
There are often other repayment choices available in addition to the conventional 10-year payment plan. Again, talking with your lender will earn you much more than just disappearing from the map.
Think about Refinancing
If your spouse is eligible, think about refinancing the debt into a new loan with a lower interest rate.
The best choice for private student loans is this one. If they refinance their federal student loans, they can lose their options for repayment and their chances of being forgiven. If they want to refinance, they must have a reliable income and a credit score in the high 600s.
Whether you’re worried about your student loans or your future potential to qualify for a mortgage or other financing, it’s a good idea to discuss money with your spouse before you get married.
You may develop a sound plan for handling bills and achieving shared objectives by being aware of how much debt you both have and your expectations for whether you’ll pay it off jointly or separately.
Student debts might be stressful, but the financial strain does not have to affect your marriage.
You may establish an agreement that boosts your finances and union by working proactively and as partners to deal with your student debts.