- When Mary Wheeler first learned that her husband had nearly $US34,500 lingering in student loan debt, she was determined to help him pay it off as quickly as possible.
- Wheeler learned everything she could about her husband’s loan types, interest rates, and due dates before creating a repayment action plan.
- After two years, they had finally paid off the entire balance together – $US22,680 of which Wheeler paid personally.
- “People may say paying off someone else’s debt is enabling them,” Wheeler said. “But I didn’t see it this way. Student loans are different from other debt. By paying down his loans, I was building our net worth as a couple.”
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Before I married my husband, I knew he had student loan debt. But I didn’t know exactly how much, nor did I ask. One day, I was sorting through some paperwork when I stumbled across one of his student loan statements. After reading it, I was shocked to see a balance of almost $US35,000. In the eight years since we had graduated from college, he had only chipped away at $US15,161 of the principal and paid $US14,924 in interest.
Shock turned to anger.
I wasn’t angry at my husband. I was angry at the student loan servicer. How was it possible that he had paid $US30,000 to date, but still owed an additional $US34,500? I naively thought.
While anger doesn’t get rid of your debt, it can be a great motivator. So I got focused, did my research, and created an action plan to eliminate his debt in two years.
1. Ask yourself why
When it came to my husband’s student loan debt, I asked myself an important question: Why did I want the debt gone? It had relatively low interest rates, tax write-offs, and a low monthly payment – so what was the big deal?
The thought of having student loan debt until our late 40s or early 50s was terrifying. That was my main motivator: time. Taking 30 years to pay off an undergraduate loan in TV studies was baffling.
The amount of interest we could save was my next motivator. And lastly, we were looking to buy a house. The lower our debt-to-income ratio was, the better our mortgage terms would be. So going into this, I knew I had three concrete reasons why I wanted the debt gone.
2. Do your research
I learned everything I could about my husband’s loan types, interest rates, and repayment schedule. Since the loans were legally not in my name, I could only go off the information on the statements. Turns out he had five different loans (one fixed and four variable) with interest rates varying from 3.7% to 6.1%. He was on an income-based repayment plan, and had only been making minimum monthly payments of $US232. At this rate, it was going to take him 18 more years to retire his loans.
While the initial process was overwhelming, I found that doing my research and knowing exactly what I was getting into was a great starting point.
3. Set a realistic timeline
After I showed my husband that he was spending around $US1,500 a year in student loan interest, we decided that I would start paying a portion of his loans – with a deadline of two years. We didn’t decide on a set monthly amount – the expectation from the beginning was just whatever I could contribute. My average monthly payment was $US612.
When I was determining how much extra to pay each month, I would often use the Student Loan Hero prepayment calculator. It was a powerful illustration of what an extra $US10 or $US25 per month can do to your principal balance. That motivated me to keep stretching my payments a little higher. Over the two years, I also made four larger lump sum payments – ranging from $US1,500 to $US2,670 – by taking funds from my savings or a tax refund.
4. Maintain other financial goals
During this time, I continued making contributions to my retirement account and saving for a down payment on a house. I wanted the debt gone, but I also didn’t want to put all my eggs in one basket. I had other financial goals – and I didn’t think it was realistic or sustainable to neglect these just to become debt-free.
5. Become an authorised payer and keep good records
To streamline the process, my husband made me an authorised payer on his account. I made all my payments through QuikPay – which was linked to my checking account. After a payment was made, I would email the provider asking them to apply my payment to the principal balance of a certain loan, and that it should not be treated as an acceleration of a future payment. All payments were logged in an Excel workbook, which included the payment amount, date of payment, and loan total after the payment had been processed.
6. Own your decision
When I told a friend what I was doing, she thought I was crazy. “It’s not your debt,” she told me. But when you’re married, it is your debt. And as a couple, it’s important to tackle it as a team and remove any negative emotions that could cloud your judgment and ultimately sabotage your end goal.
People may say paying off someone else’s debt is enabling them. But I didn’t see it this way. Student loans are different from other debt. Don’t get me wrong – debt is debt. But his student loans were a one-time debt and have proven to be a solid investment. By paying down his loans, I was building our net worth as a couple.
I realise that what I did won’t work for everyone. When paying off a spouse’s debt, you can’t view this as a “loan” or expect to be paid back at some point. You’re willingly giving this money to help them with no resentment. If you can’t get past this, you shouldn’t pay off their debt.
It’s been a little over a year since we paid off the full balance. In total over two years, I paid $US22,680 and my husband paid nearly $US12,000, making the total cost of his undergraduate loans nearly $US65,000. Every so often I still log into his account just to see, “Your balance is currently $US0.” The joy I feel when I see this is insurmountable. My decision to pay off a portion of his loans was entirely psychological, not financial. It’s a greater high than anything I could get from the stock market.
Mary Wheeler is a freelance writer based outside Boston, MA, and a p
rogram manager at MIT Sloan School of Management
. Her work has appeared in Metro US, Men’s Journal, and several regional publications.
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