Love and Loans: How Couples Can Pay Down Student Debt and Build a Joint Financial Future

Couples in committed relationships share a lot of things, from values and goals to favorite takeout places to Netflix and Spotify accounts. But many couples share something else: student loan debt. It’s not at all unusual—nearly 70% of people holding a Bachelor’s degree leave school with college debt—but it can be trying and cause concern.

If you and your partner are in that group, you might have already discovered how student loan debt can affect your financial lives. And if you’re like 54% of people surveyed, you might even have had second thoughts about taking on the debt of the person you love.

The good news is, whether you’re just moving in together or one of 70% of people who enter into a marriage with debt (via The Simple Dollar), you can navigate your student debt together, and even combine forces to pay it down faster . The key? Open communication and a team approach to building a solid financial foundation.

Different debts, same financial future

With federal student loan borrowers averaging almost $29,000 in outstanding debt last year, it’s understandable that paying off loans might be a source of tension for couples. In fact, finances are the leading cause of stress in relationships. More alarming: Research out of Kansas State University reveals that arguments over money are the top predictor of divorce.

But you can avoid being a statistic by talking openly and honestly about your student loan debt. Whether one or both of you have student loans, you can evaluate how that debt impacts you as couple. By discussing the best ways to contribute to shared bills, such as utilities and rent, and how much you can put toward saving for big milestones, such as wedding or home and retirement, you’ll take the first step.

Digging into debt details

Discussing debt isn’t romantic—that’s a given. But the information you gather through open communication will help align your strategies and inform your decisions as a couple going forward. Those decisions might include whether you should refinance student loans, which loans to pay down first, and even whether you can afford to take on new debt, such as a mortgage. When you focus the conversation on numbers, not emotions, you can be more productive.

Related: How to Tackle Student Debt Without Sidelining Your Marriage

To start, make a list of the student loans you both hold, and include the interest rates, the monthly payment amounts, and the current balances on each. Also, dive into how each of you has handled debt in the past. Ask the important questions— Have you ever missed a payment? Have you ever refinanced or consolidated your loans?— and pull your individual credit reports from an online site such as annualcreditreport.com. Though SoFi considers factors such as employment history, education, income, and monthly cash flow, credit history plays important roles in determining the interest rates traditional lenders will offer.

Then, compare your lists to determine which loan could potentially be eliminated first. Focusing on loans that have either the lowest balances or highest interest rates gives you a place to start. For example, the snowball method of debt reduction is one where you pay off the loan with the lowest balance by tackling it aggressively. But if you plug your numbers into a student loan calculator, it might indicate that your best bet is to start with your highest interest rate loan debt, because it costs you the most money to carry.

Tap the power of two

Once you and your partner have assessed your total student debt, you can craft a plan for paying it down together. Two heads are definitely better than one in this case, because you increase your options.

Let your joint financial priorities guide you; you might have to make some sacrifices. For example, 40% of borrowers said they’ve put retirement savings on hold because of student debt (via Consumer Reports). And 30% have delayed plans to buy a home for the same reason. So discuss the budget adjustments you’ll have to make to pay off your loan debt.

If you both want to be debt free as soon as possible, consider using your combined income to aggressively pay down your student loans. If you have a child, and one spouse wants to work part-time to cut down on daycare expenses, then perhaps the other makes the lion’s share of monthly loan payments to make it happen.

When marriage makes a difference

Couples planning to tie the knot should consider how marriage might affect their student loan debt— and who is liable for that debt if you divorce. In most cases, student loan debt incurred before marriage remains the responsibility of the borrower. But if you or your spouse takes on a student loan while you’re married, then that debt may belong to both of you, depending on the laws of your state.

Your marital status can also affect your loan payments. If you have a student loan with an income-based repayment plan, meaning your loan payments are based on earnings, then your spouse’s income can potentially increase the amount you pay.

If you’re not married yet, but thinking about it, check with your lender to ensure you’re not caught off guard by stipulations in your plans.

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Ramp savings by refinancing

Explore consolidating. Although you can’t consolidate your debt with your spouse’s, you can combine your own multiple loans into one new loan. So consider whose loans are the best candidates for refinancing—yours or your spouses, or both. Refinancing simplifies the repayment process and could save you money if you’re approved for a lower interest rate.

If one of you doesn’t qualify for a student loan refi, or if the rate isn’t as low as you had hoped, don’t fret. You and your significant other could consider co-signing to get rates down even lower.

Depending on your jobs and the type of loans you have, one or both of you may be eligible for loan forgiveness programs, which you wouldn’t have access to after a refinance.

Track your progress

Once you agree on what you both want to accomplish with your student loan debt payoff plans, track your progress to stay focused on the debt reduction prize and keep future goals in view. As your student loan debt dwindles, agree on a number that you both feel confident signals you’ve made enough of a dent in your debt to move onto other goals, such as buying a home.

Digging out of student loan debt as a couple isn’t easy, but it doesn’t have to be a cause of going to bed angry at each other. Put your well-educated heads together to identify your options to eliminate debt and secure the financial footing you want for a future together. Your finances and your relationship will benefit.

Need further guidance on your student loan journey? Check out our student loan help center for additional resources and guides.