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Consolidating Student Loans With Your Spouse

Consolidating Student Loans With Your Spouse
Rebecca Safier
Rebecca SafierUpdated October 12, 2022
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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
If you and your spouse are juggling multiple student loans, you might be wondering if you can simplify repayment by unifying the loans by consolidation. While it’s not possible to apply for federal Direct Loan consolidation with your spouse, you might be able to consolidate with a private lender through refinancing. However, it’s important to understand both the pros and cons of student loan refinancing with your spouse before you apply. Let's take a closer look at what student loan consolidation is, along with your options for consolidating student loans with your spouse.    

What is Student Loan Consolidation?

Student loan consolidation refers to combining multiple loans into a single loan to simplify repayment. If you have federal student loans, you have two options for consolidating: by applying for a federal Direct Consolidation Loan or by refinancing with a private lender. Unfortunately, there’s no way to consolidate student loans with your spouse with a Direct Consolidation Loan. While the government offered a Joint Consolidation Loan in the past, this program ended in 2006. You can now only apply for federal loan consolidation on your own. However, you might be able to find a private lender who will let you combine student loans with your spouse through refinancing. PenFed Credit Union, for instance, offers this option with its Spouse Loan. When you consolidate through refinancing, you take out a single, private student loan in place of your existing loans. If you refinance any federal loans with a private lender, therefore, you’ll lose eligibility for federal repayment plans, forgiveness programs, and other protections.But you might be able to simplify repayment and get a lower interest rate, which could save you money on your education debt. 

Can You Consolidate Student Loans With Your Spouse?

It might be possible to consolidate student loans with your spouse if you meet a private lender’s requirements for credit and income. As mentioned, PenFed Credit Union is one lender that offers this option. When you apply together, PenFed looks at the higher credit score. If you qualify, the refinanced student loan will be in both of your names, and you’ll share responsibility for paying back the debtAs discussed above, you cannot consolidate student loans with your spouse via a Direct Consolidation Loan. You’d have to apply on your own, which could be worthwhile if you want to consolidate federal loans or become eligible for certain repayment plans. 

Pros of Refinancing Student Loans With Your Spouse 

There are both pros and cons to refinancing student loans with your spouse. Here are some of the potential benefits. 

Simplify Repayment 

If you’re keeping track of multiple payments and due dates, consolidating with your spouse could simplify things. Through refinancing, you can winnow your various loans down to a single loan with one monthly payment. 

Lower Your Interest Rate 

One of the biggest benefits of refinancing student loans is getting a better interest rate should you qualify. Lowering your rate can save you and your spouse money over the life of your loan. You will likely need a strong credit score to qualify.Let’s say, for example, that you owe $50,000 at an 8.0% rate. Over 10 years, you’d pay $22,797 in interest charges. But if you can refinance for a 5.0% rate, you’d pay just $13,639 in interest over 10 years. Lowering your interest rate can make a big difference in your long-term borrowing costs. 

Help Your Spouse Qualify 

When considering your application to refinance student loans with your spouse, certain lenders look at the higher credit score and your combined income. If one partner has a low credit score or is a stay-at-home parent, they’d have trouble qualifying for refinancing on their own. By applying together, one spouse’s strong financial credentials can make up for another spouse’s weak credit. 

Cons of Refinancing Student Loans With Your Spouse

At the same time, there could be some downsides to debt consolidation with your spouse.  

Difficult to Get Out Of 

When you refinance student loans with your spouse, you end up sharing the loan. If you decide to end your relationship, you’ll still share this debt, even after a divorce. Even if you agree that one person will repay the debt, both names remain on it, meaning both parties could see their credit scores take a hit if payments are missed. One borrower might be able to refinance the loan in their own name, but they’d have to apply separately and meet a lender's requirements for credit and income.

Not a Lot of Options 

Not many lenders let you refinance student loans with a spouse. Student loans and marriage is a tricky area, it seems. PenFed is one of the only lenders (if not the only lender) that offers this option. When you refinance student loans on your own, you’re able to shop around with multiple lenders to find your best rate. If you’d prefer to explore your options but can’t meet a lender’s underwriting requirements on your own, you could have your spouse cosign your loanYour spouse will become equally responsible for the debt, but some lenders offer the option of cosigner release after a certain period of consecutive, on-time payments. 

The Takeaway

If you and your spouse are paying back multiple student loans, refinancing your student loans can help simplify repayment. However, you might only have one option for refinancing student loans with your spouse (PenFed Credit Union), and you’ll need to meet a lender’s underwriting requirements. Plus, refinancing federal loans turns them private, meaning you lose access to federal repayment plans and protections. Before you apply to refinance student loans with your spouse, make sure you understand both the benefits and potential drawbacks. If you’re interested in refinancing student loans, Lantern can help you find and compare student loan refinancing options. These loans would only apply to people looking to refinance on their own.

Frequently Asked Questions

Can you consolidate student loans after marriage?
Can I transfer my student loans to my spouse?
What happens to student loan debt when you get married?
Photo credit: iStock/fizkes

About the Author

Rebecca Safier

Rebecca Safier

Rebecca Safier has nearly a decade of experience writing about personal finance. Formerly a senior writer with LendingTree and Student Loan Hero, she specializes in student loans, financial aid, and personal loans. She is certified as a student loan counselor with the National Association of Certified Credit Counselors (NACCC).
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