Experts reveal that student loan debt may cause splits
Although there are many reasons why couples divorce, money is one of the common stressors that cause problems in relationships. Debt is a major contributor to that stress. For younger couples, that debt stress frequently comes from one source in particular: Student loans. On average, college grads matriculate with a diploma and $37,000 in loan debt.
According to a new survey of more than 800 divorced adults conducted by the website Student Loan Hero “more than a third of student loan borrowers claim that debt and other money factors contributed to their divorce. In fact, 13% of divorcees blame student loans specifically for ending their marriage.”
Many relationships are impacted by this substantial financial burden, says Student Loan Hero. Thirty-six percent of student loan borrowers report having lied to a partner about money. Many student loan borrowers indicated that they delayed big relationship steps, such as starting a family, because of their debt.
If your marriage is struggling under the weight of student loan debt, there may be options to relieve the pressure. Experts suggest looking into these three financial tools to improve your monthly cash flow and reduce debt.
1. Income Driven Repayment (IDR) plans.
If you have federal student loans and aren’t already on an IDR plan, applying for one could reduce your monthly payment to between 10% and 20% of your discretionary income.This option alone can ease a lot of short-term cash flow problems and make it possible to cover other essential expenses and work toward other financial goals. Private student loan companies typically don’t offer IDR plans.
2. Apply for a forgiveness program
Federal student loans also give you access to loan forgiveness, primarily through the Public Service Loan Forgiveness (PSLF) program and teacher loan forgiveness. Debt relief may be achieved after you’ve made 120 qualifying monthly payments if you work for a qualifying government or nonprofit organization and meet other requirements.
3. Student loan refinancing
Student loan refinancing companies allow you to consolidate your student loans into one new loan and potentially get a lower interest rate or monthly payment in the process. You’ll need a solid credit score and financial profile, but refinancing may help lower monthly payments by spreading the debt out over up to 20 years.
Remember, if that hard-earned diploma is now tarnishing your marital bliss, there are options beside divorce. It’s always a good idea to meet with a certified financial advisor to determine the best plan for you. Many banks and financial institutions offer free consultations with debt relief counselors or financial specialists who can guide you through the process of establishing a realistic budget and goals. Working through this monetary rough-patch might yield a fresh start for your relationship. And even if you can’t save your marriage, you can formulate a plan to start a new life debt-free.