How to Assume a Spouse's Student Loan

When you get married, you might want to share student loan debt jointly with your spouse or move your spouse's student loan debt into your name. However, the Higher Education Reconciliation Act of 2005 made it impossible for lenders to put student loan debt in a spouse's name because it would become complicated in a divorce. Therefore, you have to convert the student loan debt into a different type of debt if you want to put your name on it.

Instructions

Consolidation Loan

1

Ask banks and credit unions about interest rates and terms on personal debt consolidation loans.

2

Choose the bank or credit union with the best rates and terms. In general, you want the lowest interest rate possible with a low origination fee. If you are also trying to lower the amount of the monthly payments, look for a loan with a longer repayment term than the term that remains on your spouse's student loan.

3

Apply for a consolidation loan of an amount equal to the sum of your spouse's student loans that you would like to assume. Add the amount of your loans in the application if you want to put them in the consolidation loan as well. Loan approval will be based on several factors, including your income, employment stability, other debt commitments and past credit history. Making debt payments on time, applying for credit sparingly and keeping low balances on your credit cards in comparison to their credit limits all help your credit score and increase your chance of approval.

4

Use the money from the consolidation loan to pay off your spouse's student loans.

Home Equity Loan

5

Multiply your home's current market value by 0.8 and subtract the outstanding balance on your mortgage to calculate the amount of equity in your home. Multiplying by 0.8 assumes the lender offers loan amounts based on an 80 percent loan-to-value ratio, which means the lender will loan you 80 percent of the home's appraised value. Some lenders offer loans based on different loan-to-value ratios, in which case that number should be used to calculate equity.

6

Compare the amount of equity to the total balances on the student loans you would like to consolidate. If the equity exceeds the loan balance, you might be able to consolidate with a home equity loan. Using a home equity loan to consolidate is typically more cost-effective than getting a personal debt consolidation loan, because the home equity loan is secured by the home and has a lower interest rate.

7

Apply for a home equity loan of your desired amount with a lender of your choice. This could be your mortgage lender or a different lender.

8

Complete the application and loan origination process with the lender. If approved, use the money from the loan to pay off your spouse's student loans.