Money has been ruining monogamy for a long time, but that’s usually been about credit card debt or compulsive shopping. That’s still true: If you divorce in the U.S. today, the odds are strong that somebody ran up the plastic. Yet recent research also suggests that student debt has become a leading cause of some 13 percent of divorces, or 1 in 8. Not to mention, a separate survey found that a third of college-loan borrowers say that debt is the main source of their marital strife.
When student loans wreck marital bliss, there are a few common scenarios. Sometimes, one partner lies about having the debt in the first place, which creates additional stress on the marriage due to financial infidelity that goes far beyond being blindsided about the debt.
Second, the person’s student loans are disclosed, but are such a heavy burden that the couple finds themselves delaying precisely the milestones that newlyweds look forward to — e.g., buying a home, traveling or starting a family. One survey found that college loans were the barrier to home ownership for 36 percent of graduates. Other research has also found that not every spouse is the helping type: Around 54 percent of spouses refuse to help pay off their partner’s previously incurred debt.
The third scenario, however, is the least discussed of the group — partners who take on student loan debt accrued during the marriage or relationship by cosigning on it. Take John (not his real name), a 32-year-old engineer who agreed to cosign his wife’s student loans so she could advance beyond working as a receptionist at a veterinary clinic to pursue a career in wildlife and natural resource management. “When a significant other asks you to cosign a student loan, what choice do you have?” he tells me. “It’s a rock-and-a-hard-place kind of situation. You really don’t have a solid argument to discourage cosigning. Because your marriage isn’t going anywhere, right? Really, it’s a no-brainer, since you’d look like a total selfish jerk if you didn’t cede the point.”
And so, he definitely ceded the point, signing up for a shared responsibility on $20,000 in loans at 11 percent interest to support her career aspirations. Then, she decided to cut her hours in half and participate in only online courses. “This hit our budget from two directions: more expenses and less income,” John explains. “This created a lot of animosity, since I was now responsible for well over 70 percent of our income. There were also a lot of issues with her bingeing Netflix, going to the beach and shopping while ‘doing schoolwork.’”
Needless to say, the marriage didn’t survive. John, though, was still left with the student loan debt for a career his ex-wife never even pursued. To make matters worse, he discovered she was making only $25 payments every other month against the loans, which had since ballooned from $20,000 to $30,000 — an amount for which he was completely on the hook (divorce or no divorce).
That’s when he realized he hadn’t fully understood what cosigning really entailed. “It was my impression that my cosigning gave more weight to the borrower, and that I was secondarily liable for the debt,” John says. “But really, both signer and cosigner are mutually responsible, and the credit companies can go after anyone they choose. In practice, it’s generally the primary borrower. Post-divorce, the primary borrower has to make a year of on-time, full payments before the lender will consider removing a cosigner at the request of the primary borrower. Since the other party is unmotivated to do either, I’m essentially a credit hostage. If she declared bankruptcy, 100 percent of the burden would land on my lap with little recourse outside of a civil suit.”
Thirty-two-year-old Allen also made the mistake of cosigning for his then-girlfriend’s student loans, only to marry, divorce and start getting collection calls looking for a payment on her bill, which totaled $14,000 at 10.26 percent interest. He also had $48,000 of his own student loans to contend with, and suddenly, his ex-wife was no longer answering the phone.
“The debt wasn’t even in my mind when divorcing,” Allen explains. “I just wanted her to be responsible for her half. The only problem is that I was a cosigner on the loan, so while legally I’m not obligated to pay it because she agreed to take over the debt as part of our marriage settlement, I’m still on the hook for the bill because in the lender’s eyes, I’m still a cosigner. She pressured me into cosigning, which I regret in hindsight, though to this day, I wouldn’t be so upset if she’d at least graduated. But she dropped out, and after we divorced, I found out she’d dropped out two more times. So I’m not sure where the money went.”
Typically, divorce law requires that you take the same debt you bring into the relationship out of it, but that won’t change the number of years you spend married helping pay it off. In some cases, you can negotiate being repaid the portion of the other person’s debt that you contributed toward eradicating. But if the person with the debt took a degree with low-paying career options — or changes their career to something in which the expensive degree was more or less useless — it creates enormous resentment. (How much resentment exactly? One study found that 32 percent of borrowers have decreased libido.)
That’s likely why many of the online discussions about student loan debt are about what to do when going into a marriage with college debt. In one post last year, for example, someone queried r/StudentLoans for advice on how to pay off a fiancé’s whopping $390,000 in student debt with a roughly 6 percent interest rate with a current income of only $48,432. (That was the price tag for medical school.) In another, a guy asked r/PersonalFinance what it means to “marry into student loans.” His girlfriend has $40,000 worth of college loans ahead of her, and he has none. His own parents divorced over money, and he wanted to know how, if possible, to ward off the same fate.
Such advice-seeking and awareness puts these folks ahead of the game, because the only real solution to handling the student loan debt your marriage inherits is to treat it as a couple and annihilate it together like a case of bedbugs. “Communicate together to make a plan for paying off the student loan debt, and then stick to it,” Ashley Dixon, associate planner at Gen Y Planning, tells me. “Once you have it in writing and you both agree to the plan, you’ll both feel better about it.”
In financial counseling, Dixon says she commonly sees that the indebted person feels guilty about the debt they carry, which she tries to help put into perspective. “You might have student loan debt,” Dixon says. “But are you also earning the most income in the relationship? Are you a parent carrying student loan debt, but have decided to take a few years off because daycare costs are more expensive than what you could earn and be paying toward your student loans? If it still bothers you — and is a thorn in your relationship — maybe pick up a side hustle for additional income to allocate directly to your student loan debt.”
“Lessons learned,” John tells me about getting stuck with his ex-wife’s college loans. She now pays $50 a month on one of the loans, but the other one is in forbearance, a ticking time bomb that could come for him at any moment. “Cosigning is a tool to complicate people’s lives, and bog down more people in the overbuilt education system that we were all pressed into — if for no reason than to keep us entrenched in the system,” he says. “Cosigning also takes advantage of personal connections almost in a predatory manner.”
Meanwhile, he’s still whittling away at $50,000 of his own loans.