How to Tackle Student Loan Debt as a Couple

Do you have student loan debt and aren’t sure when or how to bring it up in your romantic relationship?

It can be an uncomfortable topic to broach, but remember that student loan debt is more common now than ever. You aren’t the only one dealing with this issue.

How to start to talk about student loan debt

Let’s be clear about something – student loan debt is definitely something that you should bring up, but it’s generally not good first-date material. First dates should be spent figuring out if you and the person you’re with have a connection, not disclosing all your personal financial details.

But after you’ve been on a few dates with someone and have determined that there might be a future there, you should consider bringing up your debt. Sure, it can be awkward, but it’s best to talk about it early in the interest of transparency. Plus, it’s not the end of the world. By this point, you might have already had candid conversations about debt in general, and millions of people have student loan debt – you’re not alone in this.

Why bring it up early? It may seem rash to disclose your debts within the first few months of knowing each other. But look at it this way: you don’t want to first mention it when you’re about to go ring shopping. You’ll know when you’re starting to get serious about someone, and that’s when you should bring up your student loan debt.

While it might feel embarrassing, being upfront and open about it is actually a responsible and honest move. Both those traits are desirable in a partner, and your significant other will probably respect and appreciate you for being so forthcoming.

Discuss your options for handling the debt

Even though they’ll probably appreciate your honesty, your partner may be less than thrilled to hear you potentially owe tens of thousands of dollars in student loan debt. That’s understandable: if you decide to live together or get married, it will have a long-term impact on both of your financial decisions.

That being said, there's plenty for you to discuss about how you want to approach the debt. You’ll need to quantify the impact on your joint budget, if you have one. If you’re considering living together, you’ll also want to decide whether you should rent an apartment or put money down on a house. Finally, you’ll need to establish a plan of action to tackle your debt.

There are various debt management options available to couples, but the first part of the question revolves around whether you want to fully combine your finances as a couple — including your debt. Alternately, you can decide to combine incomes or share some accounts, while keeping old student debt separate for the time being.

Should you consolidate your student loans or handle them separately?

If joint finances are the move, some couples may consider moving forward with private student loan refinancing and consolidation. Do not confuse this with federal student loan consolidation, which isn’t an option for married couples to conjoin private and federal student loans.

When you refinance student loans with a private lender, you essentially apply for a new loan with a bank or lender. This new loan is used to pay off the previous loans. In short, you are left with one student loan which comes with a new interest rate, repayment term, and terms and conditions.

So should you bother doing this? If your joint income is high and one spouse has a high individual credit score, then you may be able to secure a lower interest rate on the new loan. A reduced interest rate is one of the main incentives for refinancing, because it will save money on a successful repayment.

What’s the argument against consolidating? If you don’t have high income or solid credit, then you may not be able to get a lower rate, and your chances of approval are lower as well. Further, refinancing with a private lender will negate any federal student loan benefits, such as income-driven repayment options, or the prospect of student loan forgiveness.

Using budgeting tools to help you pay off your student loans earlier

Whatever option you choose, it’s best to pay off your loans diligently. The sooner you pay them off, the sooner you’ll be rid of the accruing interest and monthly payments. You may want to enlist the help of personal finance tools, like Zeta, that are made for couples. This can help you budget and stay on the same financial page as a couple.

Communicate, tackle it early

However you choose to handle student loan debt as a couple, it’s important to stay on top of monthly payments. With that covered, you can and should discuss your options — whether it’s fully combining finances or consolidating your student loans.

The best way to handle any major money issue in your relationship is by communicating – and student loan debt is no exception to that rule. Having a frank discussion about your debt and goals can help you both find the best path of action for your relationship.

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Jeff Gitlen is a Content Associate from LendEDU – an online personal finance resource and blog.