Recent college graduates struggle with their student debt. About 60% have nearly $29,000 outstanding on student loans after borrowing to pay for their education. Many are confused about how getting married may affect their tax situation, their ability to pay down their debt, and their spouses’ financial standing.
While getting married doesn’t automatically make student loans a shared legal responsibility, doing so could affect the amount of payments under popular repayment plans such as Pay As You Go. It could also affect plans that reduce monthly payments to fall more in line with the limits of disposable income. Filing taxes separately could help keep student loan payments low, but it also limits the availability of some important tax breaks that young couples need during the years when their earning potential may be low.
It’s smart to pay off loans as quickly as possible to minimize interest charges, but that isn’t possible for many couples facing nearly $60,000 in combined student loan debt. At this point, almost 30% of adults under the age of 40 with student loans say the debt is causing them to delay buying their first home.
It may be smart to put off the wedding as well if the payments on an income-based repayment plan will rise significantly when combining household finances.
