Am I Responsible For My Spouse’s Student Loan debt?

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  • Am I Responsible For My Spouse’s Student Loan debt?
Author: Joseph Reinke, CFA

Am I responsible for my spouse’s student loan debt is a question we get frequently at FitBUX. This question has several different layers to it.

Before we get into anything, this is going to be generalized information as we are not lawyers. There are many caveats.  Therefore, if you had any potential life altering changes regarding this topic, consult with a lawyer.

In General

Student loans are different than other debt.  For example, student loans vs mortgage debt. They are completely different when it comes to who is liable.

In most cases, you are not legally responsible for your spouse’s student loans.  This is especially true when it comes to Federal loans.

However, that’s not to say your spouse’s loans won’t affect your life. You should still build a plan together instead of individually.  We’ll get more into just how their loans could affect your life a little bit later on.

Are You Cosigned to Your Spouse’s Student Loans?

This is one of those aforementioned caveats. The answer to this question is actually pretty straightforward. If you are cosigned to your spouses loans (whether it be private or federal loans), then you will be legally responsible for your spouse’s student loans.

If something were to happen and your spouse couldn’t make their student loan payments, you will be liable to make the payment.

Before becoming a cosigner, understand the risks involved with being a cosigner.

The most common reason for a spouse to becoming a cosigner is when looking to refinance their loans post graduation.

You should look to refinance by yourself first. However, if you get denied you can potentially qualify by adding a cosigner.

Community Property States

If your spouse took out loans before marriage, you’re generally not responsible for them.

However, if your spouse took out loans after you got married, it’ll depend on if you’re in a community property state or not.

For reference, there are currently 9 community property states that affect student loan liabilities.  They are:

  • Alaska
  • Arizona
  • California
  • Idaho
  • Louisiana
  • Nevada
  • New Mexico
  • Texas
  • Washington
  • Wisconsin

In general, being in a community property state usually means that debts taken out post marriage are your responsibility.

However, if your spouse uses federal student loans after marriage, there’s a good chance you won’t be legally responsible for them.

Private loans work a lot different than federal loans do. If your spouse took out private loans after you were married and you do live in a community property state, odds are you be liable for your spouse’s student loans.

A lot of private companies have their own set of rules and stipulations, so make sure to read up on what those specifics are before choosing a private student loan company.

Legality Aside, How Am I Affected?

Although you may not be legally responsible for your spouse’s loans, that doesn’t mean you’re completely home free. Your spouse still has to make student loan payments which will directly affect you.

What if your spouse had a $1,000 per month payment they had to make each month? That’s $1,000 less a month that could have gone to another goal such as investments or a down payment for a house..

Your spouse having student loans can also affect you buying a home. Qualifications are based on items such as your combined Debt to Income Ratio (DTI).  Therefore, when buying a house you’ll have to determine if adding your spouse to the mortgage is a benefit or not.

If you want to see how much your spouse’s student loans will affect home much home you can afford, check out this home affordability calculator.

Also, we highly recommend chatting with a mortgage lender as soon as possible if you are thinking to buy a house.  They will be able to help you decide the best way to buy the house if your spouse has student loans.  The trick is finding a good lender that can analyze this for you.

Two really good lenders that can help you are Neo Home Loans and Movement Mortgage.

FitBUX Partner NeoHome Loans

What Happens if My Spouse Dies?

This will depend on whether you have federal or private loans. If you have federal loans, they are usually discharged and you won’t have to finish paying off your spouses loans.

If you have private loans, it will depend on the specific private company.

This is one major topic to look into before refinancing with a private lender.

Almost all private lenders, including the 9 best student loan refinance companies FitBUX works with, do not discharge the loans by default.  This means technically you will be liable for them.

However, in the 7 years we’ve worked with these lenders, we have never seen them not dismiss the loan if the individual dies.

Here at FitBUX, it’s all about getting a plan. You may decide you want to come together as 1 and both tackle the loans head on to get those over and done with so you can move on with your goals in life whether it be to buy a new house or having kids.

Become a FitBUX member and we’d be happy build a financial plan with our one-of-a-kind financial planning technology so you can achieve financial freedom as soon as possible.

By David Hughes and reviewed by Joseph Reinke, CFA

Joseph Reinke, CFA

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About the Author

Joseph Reinke is a Chartered Financial Analyst (CFA) Charter Holder and founder of FitBUX which has helped over 14,000 young professionals on their journey to financial freedom. Joseph has been personally investing since he was 12 years old.

In addition, he has experience in student loans, mortgages, wealth management, investment banking, valuation, stock trading, and option trading. He has been on 100s of podcast and has been invited to 100s of universities to discuss financial planning with their soon to be graduates.

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