If you’re married and taxes are filed jointly, the IRS is well within legal rights to take your entire tax refund to cover the outstanding debt. To avoid this, you can file an injured spouse claim form referred to an IRS form 8379. This is used in the instance of an innocent spouse as part of the innocent spouse relief program. So let’s take an extensive look at some of the most common concerns about marrying someone with student loan debt. We’ll also cover topics such as student loan debt responsibilities and consolidation options. It’s also best to find out your partner’s reaction sooner rather than later.
Student Loan Forgiveness: Relief for Public Loans Pushed Back Due to Lack of Funds
But each spouse is liable for half (50%) of the debts incurred after marriage unless they have a legally binding prenuptial agreement, which states otherwise. However, in some states, such as New York, a professional degree earned during the marriage can be considered marital property due to the lifetime earning potential. And any debt incurred while obtaining what’s considered marital property is usually categorized as marital debt.
Adopt a Debt Payoff Strategy
While you aren’t personally liable for student loans your future spouse brings into the marriage, ignoring the five or six-figure debt while dreaming about the life you want to build together isn’t wise. Those whose incomes are lower now than before the pandemic may be eligible for lower payments by enrolling in an income-driven repayment plan. Payments under one of these plans can be as little as $0 a month. The U.S. government has extraordinary collection powers on federal debts and it can seize borrowers’ tax refunds, wages and Social Security checks if they fall behind on their student loans. White House officials had hoped to ease the transition back into life with student loan payments by first forgiving a large swath of the debt. The larger issue, said Iuliano, is that most people don’t even try.
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This compensation may impact how and where products appear on this site . These offers do not represent all available deposit, investment, loan or credit products. Proudly South African, I have a history in psychology, as well as administration, but writing is my first love. I’ve been a full-time copywriter for four years and create SEO-friendly blogs, case studies, web content, landing pages, reviews, whitepapers, and more. Other than that, I enjoy helping people discover their potential through coaching, taking care of my two darling dogs, and saving the world one charity project at a time. There, assets and debts owed and incurred before marriage remain separate.
Many economists warned the move could have damaging consequences for students and taxpayers in the future, by encouraging colleges and universities to raise prices with the federal government footing the bill. But inside the White House, Mr. Biden’s top aides were debating the political and economic ramifications of the decision. According to people familiar with his thinking, the president was concerned that loan cancellation would be seen as a giveaway that would be an affront to those who had paid their or their relative’s tuition. Some top aides also argued that Mr. Biden lacked the legal authority to move forward with the sweeping loan forgiveness and that he should work with Congress instead of using executive action. Ms. Ramirez, the first in her family to go to college, used the grants to cover two years of study at a community college, then transferred to the University of California, Los Angeles.
Mr. Biden has been agonizing over how to address the student debt issue for months, under pressure from progressive Democrats who say debt forgiveness is necessary to address racial disparities in the economy. But critics say widespread debt forgiveness is unfair to those who tightened their belts to pay for college. And some economists have raised concerns that debt relief will add to inflation by giving consumers more money to spend.
In all likelihood, they are never going to work in highly compensated positions. A 2020 report estimated that approximately 7% of borrowers who then had an outstanding balance were never going to be able to pay off their student loans. I’d wager that percentage is going to end up even higher as we all roll forward into the future.
Taking on Student Debt After Marriage
Her work has been featured on major outlets including MSN Money, CNBC, and USA Today. When you’re ready to discuss your debt, make sure to be smart about when you bring it up. Ideally, it won’t be something you spring on your partner but will be part of a larger conversation about your goals and your future. Many or all of the products here are from our partners that compensate us. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. So yeah, dating is great, but it comes down to what your believes and priorities are.
And, if you feel comfortable doing so, you can explain the circumstances behind why you owe as well as your plans for becoming debt free. The cost of college has steadily increased over the last 30 years. In that timeframe, tuition costs at public four-year colleges grew from $4,160 to $10,740 and from $19,360 to $38,070 at private nonprofit institutions . As costs have risen, so has the need for student loans and other forms of financial aid. It can also translate into other kinds of financial struggles within a relationship.
Susan Rice, the White House domestic policy adviser, said the administration had not yet determined how much the student debt relief will cost because it will depend on the number of people who apply for it. By some estimates, however, it could cost $300 billion or more. Their https://loveconnectionreviews.com/ mission they say is to help Americans better manage their finances, particularly student loan debt. They currently offer a free set of financial tools for managing one’s loans and put out a weekly digest that features tips, strategies, and resources for dealing with them.
