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Consumer Reports: Marriage and student debt

Posted at 8:18 AM, Feb 15, 2019
and last updated 2019-02-15 10:18:49-05

TUCSON, Ariz. - When Dyalekt and Pamela Capalad decided to buy a house and get married they weren't thinking about student loans, but they quickly realized that debt would be an obstacle to starting their new lives.

"That was the biggest adjustment to our expectations as to how much house we could buy, and what was really going to be affordable to us," says Pamela.

In fact, 28% of adults 40 and under, who are out of college and have student loan debt in a nationally representative Consumer Reports survey, said they had to delay buying a house. In some cases, getting married can increase your monthly student loan payments.

"If you're on an income-based repayment program, and your household income goes up, your monthly payment may go up, too," says Consumer Reports Money Editor, Donna Rosato. "But it also depends on other factors, such as whether your spouse has student debt or whether you file your taxes jointly."

If you continue to file your taxes separately in most cases, your student loan payments should remain about the same as it was before marriage. That's because the payment will still be based on just the borrower's income. Use the Department of Education's repayment estimator to get a rough idea. While filing separately could mean a lower monthly payment, it also will exclude you from important tax benefits, like the Earned Income Tax Credit, the Child and Dependent Care Tax Credit and your deduction for student loans.

"We advise you to pay off your loan as quickly as you can afford to," says Rosato. "Your monthly payment will be higher, but you'll pay less interest over the life of the loan. And then you'll have more money for other important goals like buying a house or starting a family."

Another point: Getting married doesn't mean you are responsible for your spouse's existing debt if you find as a couple you are having trouble paying it off. Generally, unless you co-signed the loan, the borrower is the person who has to pay it back.