In most cases, marriage does not make you automatically responsible for your spouse’s student loan debt. In fact, unless you live in a community property state, refinance your loans together, or decide to be a cosigner for their loans, you are not legally obligated to repay their debt.
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Am I responsible for my spouse’s student loan debt?
Typically, you’re not responsible for your spouse’s student loan debt. Under the contract terms for federal and private student loans, only the borrower who signed the promissory note is legally obligated to pay back the debt.
However, there are three instances where you could become responsible for your spouse’ loans:
- if you act as their cosigner
- if you combine your education debt with a spousal consolidation loan
- you live in a community property state
Cosigning your spouse’s loans or refinancing your debt with theirs makes you liable for the entire debt. So before you agree to do either of those things, make sure you know your rights.
Borrowers who live in a community property state may be responsible for debt the other spouse borrows during the marriage, including student loans. If you want to avoid that obligation, consider getting a prenuptial or postnuptial agreement. Either of those agreements could make it so that each spouse is responsible for their separate debt.
Community property states:
- Alaska (if the married couple opts into community property rules)
- New Mexico
Is my spouse responsible for student loans incurred before marriage?
Marriage does not make you responsible for student loan debt your spouse incurred before you tied the knot. Each spouse remains responsible for the debt they borrowed to pay for school. Even if you live in a community property state, premarital debt is considered separate property.
The one time that changes is if you cosigned your partner’s private student loans when you were dating. In that case, you’re responsible for their debt because of your duties as a cosigner.
Strategies for Paying Off Student Debt
Whether it’s student loans or other kinds of debt, such as credit cards, here are some strategies to help you pay down the debt efficiently:
- Pay the highest-interest loans first. Target the student loans with the highest interest rate — regardless of whose loan it is. This debt avalanche strategy will save you the most money in the long term.
- Refinance for a lower interest rate. Depending on you and your spouse's income and credit score, refinancing for a better rate or repayment terms makes sense. Many lenders life Sofi and CommonBond offer married borrowers with good credit student loan interest rates below 4%. However, be careful about consolidating your student loan debt together. If you divorce, you'll be responsible you and your ex-spouse's portion of the balance.
- Make consistent payments, no matter how small. Making regular student loan payments, even if it’s just the minimum required monthly payment, will keep your account in good standing, strengthen your credit history, and, ultimately, raise your credit score. Making that simple financial decision may allow you to qualify for lower interest rates on a mortgage, auto loan, credit card, etc.
- If you can’t afford the payment, call your loan servicer. The Department of Education offers various repayment options based on your income and family size. You should always be able to get a payment you can afford — even if you’re unemployed. Unlike the federal government, private lenders don’t offer those same flexible repayment plans. If you fall on hard times, ask your servicer for a deferment, forbearance, or other repayment options to keep you out of default and from damaging your credit report.
No matter what’s going on with your personal finances, keep in mind that you’re not the first couple to struggle with debt. Nor will you be the last.
What if my spouse defaults on their student loan debt?
If your spouse defaults on their student loan debt and you’re not a cosigner, then you’re not legally responsible for repaying the loan. The lender can’t collect from you.
However, your finances as a household are still in jeopardy.
By defaulting, your spouse put themselves at risk for:
- wage garnishment
- Social Security and tax refund offset
- private student loan lawsuit
- bank account levy
- a lien being placed on their home
Thankfully, the federal government offers various options to get out of default and back into good standing.
Note: If you filed a joint tax return and the Department of Treasury offset the refund, you can request the money be returned to you.
Marrying with student loan debt? I can help.
If you’re worried about your or your spouse’s student loan debt, let’s develop a strategy now. You likely want to get your student loans in order quickly, so you can plan a family, buy the home of your dreams, and save for retirement.
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Schedule a free 10-minute call with me today. We’ll go over all of your options to prevent or end your student loan wage garnishment.
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