Should You Pay Off Your Student Loans Before Wedding?
The bells will ring – your fiance suggested, and you said “yes!”
But before you answer “I’m doing”, think: if one (or both) of you pay the student loan debt into a relationship, you will need to decide whether you should tie the knot now or wait until the debt is repaid .
I know, I know. Waiting until you pay off your student loan debt may seem unnecessary. Why put off your future in a pair?
Unfortunately, changing your status from one to married can have long-lasting consequences for your financial situation when it comes to student loan debt. Before walking down the aisle, weigh the pros and cons of getting married now, and do not wait until you are free from student loan debts.
Student loan debt and marriage
Does one partner have more debt than another? This can be a point of contention in your marriage.
If one of you, for example, earned $ 100.00 in debt to a student, and then defended his doctoral thesis, and the other paid for college, then the childless spouse can wait to get married. At the beginning, childless (or low-debt) spouses might we want to ignore it – after all, they are in love. They may even want to help their partner repay their loans.
But large and unequal student debts are a heavy financial responsibility, and everyday reality can become draining.
Both partners will have to live in a small house, skip restaurants and relax, and also work overtime. Will a person who has no debt have such a modest lifestyle? Or will he or she feel that their own financial goals are being held back?
Who is going to pay?
When it comes to solving this problem, there are several options. Should a spouse with a higher income make larger sums of money? Should a spouse who has acquired a debt pay more? Or do you both have to pay the same?
If you and your partner plunge into general banking and finance, you will need to talk about whether student loans will become a common debt or not. You also need to decide how much each spouse will contribute if you decide to share the responsibility.
For the sake of harmonious marriage, make these decisions before the ceremony.
You may not have graduated with a college degree. If you both want to continue your education in vocational or graduate school, who will get a degree in the first place? Will you simultaneously save your student loans and live entirely with new loans? One of you may have to work to support a family.
If you decide to continue your studies at school, will you save as much as you can before continuing your studies in graduate school? Or should you generally miss graduates in favor of starting your career and family life?
You and your future spouse must consider not only your current student loans, but also any future student loans that you can receive.
Revenue Based Redemption Plans
Perhaps the most serious consequence of student loan debt and marriage is the radical effect that they can have on income-based repayment plans.
Depending on your total income, you can get married without being eligible for income-based repayment plans, such as income-based repayment or REPAY.
For example, your qualifications for an IBR plan are based on income discretion. Once you and your spouse combine income, your new discretionary income may be too high. To avoid this, you will need to file taxes separately.
For REPAYE, your spouse’s income is considered, even if you file two files separately. If the marriage deprives you of the right to participate in this program, you may have to consider a conditional income payment plan (ICR), which contains a higher qualification threshold and capitalizes the interest annually.
Marrying someone with debts: the benefits of waiting
Even the most modest wedding can cost several thousand dollars, that is, money that you could devote to becoming debt free.
The promise of a wedding is a great motivation to pay off your debt. If you postpone the marriage, you can change the repayment schedule to pay off large amounts more quickly. In addition, you can spend more on the ceremony and reception.
Bottom line? Make a decision as a couple
It’s time for you and your fiance to talk seriously.
Do not let the financial elephant in the room cause discontent between you and your fiancé. Talking about finances can be inconvenient, but remember that your union will be clearly less perfect and far less harmonious if the topic of student debt is hidden under the carpet.
Discuss the timing of debt repayment. Talk about whose burden it will bear. Learn to communicate effectively with your partner is about finances before you are legally connected.
For more useful information : https://studentloansresolved.com/