"Wedding invitations? Check. Marriage license? Check. See how tying the knot can affect your student loan payment… You probably didn’t see that one coming, did you? Student loans may be one of the last things on your mind when you’re about to get married. But if you have federal loans, getting hitched could increase your monthly bill, depending on which repayment plan you’re enrolled in," Money reports.

..."Jill Desjean, a policy analyst at the National Association of Student Financial Aid Administrators (NASFAA), says that the servicer will calculate what percentage of the debt each spouse is responsible for to determine each of their payments.

For example, if the servicer determines that you and your spouse can pay up to $100 as a household, and you have 60% of the debt and your spouse has 40%, then your student loan payment will be $60 while your spouse’s payment will be $40.

If you choose to file taxes separately from your spouse, your servicer will only take into account your individual income to determine your monthly payment. The exception is if you’re in the Revised Pay As You Earn plan.

With that plan, regardless of how you file taxes, the servicer will always consider both of your incomes to determine your monthly payment, unless you certify that you are legally separated.

How marriage affects public service loan forgiveness

One of the benefits of having federal student loans over private loans is that you may be able to get a portion of your balance forgiven through the Department of Education’s Public Service Loan Forgiveness program.

Under this program, borrowers who work at a non-profit organization, government agency or another qualifying employer, are only required to pay their loans for 10 years, after which the remaining balance is forgiven.

'If you’re banking on forgiveness, your goal is to pay as little as possible, so that you get the most forgiven,' Desjean says.

Since filing taxes jointly with your spouse can increase the amount you’re required to pay each month, Desjean says this will reduce the amount forgiven in the end. In other words, you won’t be able to take full advantage of this program the same way you would if you filed separately."

NASFAA's "Notable Headlines" section highlights media coverage of financial aid to help members stay up to date with the latest news. Articles included under the notable headlines section are not written by NASFAA, but rather by external sources. Inclusion in Today's News does not imply endorsement of the material or guarantee the accuracy of information presented.

Publication Date: 4/8/2021

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