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Combine Student Loans With Your Spouse: 6 Pros and Cons

Kat Tretina

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Federal student loan
Payments Return August 31

We've got you covered.

Get Purefy’s free 20-page Ultimate Guide with just one click.

Getting married is a huge decision — both personally and financially. You have to adapt to each other’s lifestyles, habits, and where you spend the holidays. You may even decide to combine your finances to make them easier to manage each month.

But can you combine your student loans with your spouse?

If you think about it, most college graduates leave their schools with between eight and 10 different loans. Double that for a married couple, and you could conceivably be wrangling between 16 and 20 student debt loans, each with a different due date and loan servicer, causing untold headaches each month.

Is combining your student loans with your spouse’s debt a good idea?

Years ago, from 1993 to 2006, the Department of Education issued joint consolidation loans to married couples. Unfortunately, the government ended that program in 2006 due to concerns about how loans would be handled if a couple divorced.

However, today you can combine student loans with your spouse by working with a private lender. Purefy has partnered with PenFed to offer spousal consolidation student loans, allowing you to refinance and consolidate your loans into a single loan package with one due date and a single monthly payment.

To sweeten the pot even more, depending on your credit and employment history, you can potentially lower your interest rate saving money over the life of the loan.

In fact, married couples tend to have higher credit scores on average (which helps in securing the best possible interest rates) as well as almost twice the debt. Note the 2Q/2019 averages per Experian:

Marital Status                          Average Credit Score

Married                                                  715

Single                                                     656

U.S. Average                                         703

Spousal consolidation isn’t for everyone. If you aren’t sure if it’s right for you and your partner, here is what you need to know to make an informed decision.

Who should combine student loans with a spouse?

Spousal consolidation of student loans can work really well under the right circumstances.

Using your combined financial information, PenFed considers income and debt for both spouses instead of just one of you. That can mean scoring a much better interest rate that will cost you less money over the long term.

Let’s look at five alternatives where a combined or refinanced student loan with both spouses’ student debt makes financial sense. Afterward, you will be able to determine if this type of loan is best suited for your particular situation.

1. If one spouse is a stay-at-home parent or has low income

Individually, a person with low or no income, or with inconsistent means, will have a difficult time being approved by a private lender if they want to refinance their student loans.

When a married couple refinances their student loans, PenFed looks at the combined income of both spouses. So if one person is a stay-at-home parent or has a lower income, and the other person has a good, steady income, they can usually be approved.

2.  Someone is going to have a higher credit score

There can be a big discrepancy in credit scores between couples. For any number of reasons, one spouse may have a lower score where they wouldn’t be able to refinance their student debt on their own.

As long as one spouse has good credit (typically over 670, the higher the better), the new loan and interest rates will be based on the higher credit score.

3.  If one spouse has a much higher debt load

This can impact your debt-to-income ratio, or DTI, which is a major qualifying indicator for private lenders. With more combined income and less debt as a percentage, your DTI becomes more favorable.

That allows you and your spouse to be assessed jointly in more favorable terms. What was negative for one person can be manageable when viewed as part of the family whole.

To calculate your combined DTI, add up both spouses’ monthly debt payments, including mortgage or rent payment, loans for cars, monthly payments for credit cards, alimony and child support, etc., and divide by your gross monthly income.

Lenders want to see this ratio number as 40% or less of your total gross income. If it is higher than 40%, it’s important to make improvements to the DTI prior to applying for a refinanced student loan.

4.  If one spouse has a higher-level degree

When considering a married couple for loan consolidation, PenFed looks at who has a higher-level degree. The higher the degree, the better the loan rate offered. Typically the person with the higher-level degree is also the person with the larger income.

Advanced education is seen as a solid indicator of good income and the propensity to repay debts. While a bachelor’s degree is good — a master’s degree, Ph.D., or medical degree is viewed as highly desirable for private lenders.

5.  Collectively, you have a lot of loans

This is often the reason people begin to look at the options that are available for refinancing or consolidation. Like we talked about before, married couples can enter into their new lives with tons of student loans. It can be overwhelming trying to manage all of the due dates and monthly payments to different lenders.

When you combine student loans with a spouse, you reduce the financial complexity down to one monthly payment to one lender. Additionally, many lenders offer discounts when you set up auto payments — sometimes as much as 0.25% off of the interest rate.

When should you combine student loans with a spouse?

The best time to pursue consolidating student loans with your spouse is when interest rates are low and you are both in a good position financially in terms of income and credit history.

Additionally, to qualify for a loan, you must meet these qualifications as well:

  • You must both be of legal age in your state
  • You must both be US citizens
  • At least one of you must have graduated with a bachelor’s degree (or higher)
  • Your combined income should be at least $42,000 per year
  • Your combined student debt should be no less than $7,500 and no more than $300,000

Are interest rates at a good level?

Yes, in fact, they are at historic lows with no end in sight for that to change. With the economic uncertainty of the last couple of years, the Federal Reserve (the Fed) has opted to keep interest rates at record lows through 2023 and possibly beyond.

While inflation has been heating up, the Fed has resisted increasing rates which would have the effect of “cooling off” the economy and making borrowing money more expensive.

With PenFed, they offer only fixed-rate loans (no variable rate loans) that currently range from the mid 2% range to 5.6%+, and terms that can be customized up to 15 years.

Let’s talk pros and cons about spousal consolidation student loans

There are several benefits and drawbacks to combining your student loans with your partner’s. Here are six pros and cons to consider.

Pros of spousal student loan consolidation

1. You’ll have just one combined monthly payment

As we talked about earlier, according to Saving for College, the typical number of student loans people have at graduation is eight to 10 different loans. That means a married couple could have as many as 20 loans and 20 different monthly due dates to remember.

If that sounds overwhelming, spousal consolidation can be a smart move. You’ll combine your loans and have just one loan and one payment to keep track of each month. This can go a long way in simplifying your monthly family financial management.

2. There will be only one loan servicer to deal with

If you have several different student loans, they may be managed by different loan servicers, too. Servicers can vary widely in terms of customer support and convenience, so it can be frustrating to deal with multiple loan servicers. When you refinance your loans together, you’ll have just one loan servicer to work with, going forward.

3. You’ll increase your chances of getting approved for loan consolidation

When you apply for a spousal consolidation loan, you can submit your combined income and expenses on your application. With a higher income, you have a better chance of getting approved for loan consolidation and qualifying for a lower interest rate. Spousal consolidation is especially helpful if one person stays home or earns significantly less than their partner.

Cons of spousal student loan consolidation

1. You’ll lose federal benefits

When you consolidate your loans together, your loans will become private loans and no longer be eligible for the federal benefits afforded to people with federal student loans.

That means that if you previously took advantage of the federal student loan benefits, you’ll lose out on perks like income-driven repayment plans, federal forbearance or deferment, and Public Service Loan Forgiveness.

If either of you works for a non-profit organization or government agency, losing your eligibility for loan forgiveness can be a significant drawback.

2. Splitting up may be more difficult

No one wants to think about it, but divorce is quite common. In fact, Psychology Today reported that one in four recent marriages would end in divorce. If the worst happens and you eventually split up, dealing with a spousal consolidation loan can be complicated as you both are equally liable for the debt.

It’s better to address those concerns before you further entangle your finances. There can be tax implications as well that deserve your full attention.

3. You could be on the hook for the full balance if your partner dies

When you apply for a spousal consolidation loan, you and your partner are equally responsible for the debt. If something horrible should happen and one of you passes away, the remaining spouse may still be responsible for the combined balance of the debt. That’s true even if the deceased partner had the bulk of the original loans.

If you kept the loans separate, your spouse’s lenders would likely discharge the debt completely if they passed away, eliminating that burden for you.

Refinancing your loans with your spouse as a co-signer

Only one lender we’re aware of allows you to consolidate your student loan debt with your spouse’s:  PenFed.

But there is another option that other lenders offer: You can apply for a refinancing loan with your spouse as a co-signer.

A co-signer is someone with good credit and income who applies for the loan with you. If you fall behind on the payments, the co-signer is responsible for the loan, instead. Adding a co-signer to your application makes it more attractive to lenders because it decreases their risk.

Using your spouse as a co-signer can be a smart strategy if the primary applicant earns less than their partner or has worse credit. Having your spouse co-sign the student loan also increases your chances of getting approved and qualifying for a low-interest rate.

But why would adding your spouse as a co-signer be potentially better for you than spousal consolidation?

Some companies offer co-signer releases. After you make a certain number of payments on time, you can apply to have your co-signer released from the loan. After that, the cosigner wouldn’t be responsible for the debt at all, making things easier if you ever need to divide your finances.

Is there spousal consolidation loan forgiveness?

No, when you refinance with a private lender, you typically lose access to the federal loan benefits including forgiveness plans. PenFed, like most private lenders, expects monthly payments of principal and interest until the loan is repaid in full.

PenFed will actively work with any borrower if one or both spouses lose a job or there is an unexpected illness or death. This is done on a case-by-case basis and could result in deferment or forbearance. In the case of forbearance, interest would continue to accrue even though no payment is due.

On the flip side, there are no prepayment penalties associated with a spouse student loan through any of Purefy’s preferred lenders.

Spousal consolidation for student loans: How to check your rate

Checking your rate is easy with PenFed and Purefy. And keep in mind — there are no application fees or origination fees for spouse refinance student loans.

You can check your eligibility and get an interest rate quote for spouse student loan refinancing through Purefy and PenFed by submitting your combined household income, your combined debt, and some personal information that will allow access to both of your credit reports.

If you find that having a spouse cosign for a student loan is a better option, then by using the Purefy comparison rate tool, you can find the best solution among some of the strongest private lenders in the industry in about two minutes (and with no application or origination fees).

What are the benefits you can expect?

So what are some of the other benefits of consolidating your joint loans besides a single payment each month? You can customize your loan to meet your family’s needs for the future, including:

Better interest rates

As we’ve talked about, interest rates are historically low and there is money to be saved.

For example, by lowering your interest rate on combined spouse loans, you could save thousands in interest that can be used for other family financial goals such as a down payment on a house or starting a new business.


When refinancing your spouse consolidated loans with PenFed, you have the opportunity to choose loan terms that meet your needs — 5, 8, 10, 12, and 15 years. This flexibility allows you to tailor your new loan specifically for your family’s plans and goals. Considering the following:

  • Pay off your loan sooner — By choosing a shorter repayment term, you can have your combined spouse loan paid off sooner. This could be beneficial if you were planning to buy a new home or start a retirement fund.
  • Get smaller monthly payments — If you choose a longer repayment term, your monthly payments will be more manageable. This allows some relief if you and your spouse are feeling overwhelmed by the pressure of your current terms. Keep in mind, however, that you may spend more in interest with the longer terms.

Relieve a Cosigner

If you or your spouse used a cosigner on any of your current loans, combining those loans into your total spouse student loan refinance will free up your cosigner from any further financial obligation.

If that person is a parent or grandparent nearing retirement, relieving them of the burden will be a welcome change in circumstance as they navigate their own financial goals.

Applying for spousal consolidation student loans

PenFed’s eligibility requirements are a bit different for married couples than they are for single applicants. The company will combine your income and debt to decide if you qualify for a loan and base your interest rate on the type of degree the primary applicant has and the higher credit score between you and your partner.

To get started, you can use Purefy’s Compare Rates tool to get quotes from different lenders, including PenFed. You can also check your rates directly on PenFed’s website.

Once you find a loan option that works for you, such as spousal consolidation or a refinancing loan with your spouse as a co-signer, you can move forward with the application process. During this process, you will submit underwriting documents that will assist PenFed to verify your individual income, degree and graduation details, and credit history. This can all be done electronically through PenFed’s defined system.

Additionally, with PenFed Credit Union, you will have to become a member of their organization. If you are pre-approved, there will be an additional application in the loan package for you to fill out to apply for membership.

Once approved as a credit union member, you have access to their other products, like savings and checking accounts, mortgage services, and auto loans.

Refinancing your student loans

Refinancing your student loan debt can be a smart way to lower your interest rate, save money, and pay off your debt early. If you’re married to someone who also has student loan debt, spousal consolidation can help streamline and simplify your finances. To determine if it’s right for you, discuss the pros and cons together —and choose what makes the most sense for your family.

A final word

Can married couples consolidate student loans? With PenFed — spouses can merge or consolidate their existing student loans into one loan if they are able to meet the financial requirements. Using the best credit score between both spouses and combined income, married couples can combine multiple student loans into one loan with a better interest rate saving money over the life of the loan.

With interest rates at all-time lows, now is a great time for spouses to get a pre-approved quote from PenFed. Or if you are interested in a cosigned loan, use our comparison tool to get the best offers from multiple private lenders hungry for your business.

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