Can You Consolidate Your Spouse’s Student Loans With Yours?

Consolidating student loans with your spouse can save you money if you get a lower interest rate.
Ryan Lane
By Ryan Lane 
Edited by Des Toups

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You can consolidate your spouse's student loans with your student loans through refinancing with a private lender. But it's not always the best financial move.

If you're considering consolidating student loans with your spouse, here's how to decide if you should.

Refinancing together could save you money

Refinancing student loans makes the most sense to save money on higher-interest private and graduate school loans.

For example, by refinancing a $60,000 loan from 7% interest to 5%, you’d save roughly $7,200 over a 10-year term.

Typically, you’ll need robust finances and a good credit score to qualify and get the best rate.

Spouses may increase their chances at getting a better rate together, says Andrew Zoeller, vice president for Purefy, which refinances loans for Pentagon Federal Credit Union, or PenFed.

For joint spousal loans and loans that spouses co-sign, PenFed evaluates the couple based on their combined income and counts shared debts, like mortgages, only once. This allows more individuals — such as stay-at-home parents with good credit — to meet PenFed’s lending criteria.

Other lenders may evaluate spouses separately. Ask a lender about its policy before applying.

In 2019, 67% of co-signed PenFed student loan refinances were spousal loans, according to Zoeller.

Refinancing could make divorce messier

If you co-sign a refinancing loan or combine debts with your spouse, you’re equally responsible for repaying the balance — even after a divorce.

“There is no exit ramp,” says Joshua R.I. Cohen, a lawyer in West Dover, Vermont, who operates

For example, Cohen says a divorce decree could outline who’s responsible for repayment, but both names remain legally on the debt. That means if one spouse doesn’t pay, the other still suffers the consequences of missed payments, like damaged credit and collection calls.

Divorcees could refinance the loan or portions of it into their individual names to get around this, but only by meeting a lender’s income and credit qualifications on their own.

Should you say 'I do' to joint refinancing?

Still have cold feet about refinancing with your spouse? These steps may help protect you:

  • Try co-signing first. Co-signing may have a valuable option that spousal loans lack: programs that eventually remove your spouse from the loan. Co-signer release policies vary by lender; PenFed, for example, doesn’t release spouse co-signers.

  • Get extra life insurance. Cover yourself if your partner dies and you have to pay a hefty spousal loan on your own. You may owe the balance on a co-signed loan as well, depending on a lender’s policies.

  • Know what you're giving up. Once you refinance loans, you can’t get your original loans back. If you want or need federal loan benefits, like alternate repayment plans and forgiveness programs, don’t refinance them.

Cohen also says to make sure the savings are worth it.

“I would rather pay 2% more in interest and know I’m not tied to this idiot for the rest of my life,” he says.

Joint refinancing could stick you with unaffordable debt

Kathy Snell, 55, of Eugene, Oregon, would love to undo her spousal loan. But it has nothing to do with her marriage.

“We’ve managed even through all the financial stuff to stay happily married,” Snell says.

That “stuff” includes a joint student loan that’s grown to almost $420,000.

Snell and her husband combined their loans via a federal program that ended in 2006. Their loan isn’t eligible for Public Service Loan Forgiveness, which forgives the federal loans of borrowers working for qualifying employers — like the University of Oregon, where Snell is an attending veterinarian.

Other federal borrowers can consolidate existing loans to eventually qualify for this program. But federal spousal loans can’t be reconsolidated. Legislation to let spouses unbundle these loans is part of the College Affordability Act, which is under consideration by Congress.

While Snell’s circumstances don’t apply to private loans, she still cautions couples about the flexibility they lose by combining loans.

“Knowing now what I know, I would recommend against it,” Snell says. “Keep those student loans in your individual pot.”

An earlier version of this article was written by NerdWallet and was originally published by The Associated Press.

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