What Happens to Student Loans when You Get Married?
As many college students decide to marry and settle down, a common question is what happens to student loans when you get married. The short answer is no, your spouse does not become liable for the debt. However, they can be adversely affected by your student loan debt.
Student Loans before Marriage
Student loans you acquired before you get married have no bearing on your spouse. You are responsible for their repayment, and if you don't repay them, it will only harm your credit, and potentially garnish your wages. If you do repay them, it will help your credit, rather than your spouse's. If you divorce, your spouse has no bearing on the loans or the debt. Your spouse cannot be held accountable for any of your debt before marriage.
Student Loans after Marriage
If you choose to go back to school after you are married, your spouse still is not liable for the student loan debt, unless he or she willingly co-signs for the loan for you. This is usually done to help you get the loan in the first place or to get a better rate, and in turn a better payment. If you cannot make the payment, the spouse must make it, because in becoming a cosigner he or she vouched that if you could not make the payment they would. In the event of a divorce, both you and the spouse remain equally liable for the debt, unless the debt is refinanced and the cosigning spouse is removed from the loan.
What about Garnishments?
If you have a student loan you cannot pay and do not take the proper steps to prevent the loan from going into default, the government reserves the right to take your tax refund to compensate for the debt. As many married couples file jointly because of the penalties associated with filing separately, this means that your spouse's income tax refund can also be taken to cover the debt, even though he or she is not responsible for it. In this case, the spouse who is not responsible for the debt can fill out an "Injured Spouse" form with the IRS.
This form basically breaks down the income on the joint return into Spouse A and Spouse B. It then shows how much of the refund would go to each spouse based on their income, and refunds that amount to the spouse who is not responsible for the debt, while retaining the portion of the refund belonging to the spouse who is. For example, if a married couple had a return of $2,000, and the wife made 45% of the income and she was the one with the debt, then her husband who made 55% of the income would receive $1100, and her $900 return would be credited to her loan balance. This also takes into consideration who claims what credits and deductions as well, so it will complicate the return and take longer to process than others.