How can marriage affect loans?

[PassingDays11]

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Hey all!

I have been with my significant other for some time now and would almost positively be asking her to marry me soon if it were not for medical school and the possibility of her assets interfering with my loans/financial aid. 😎

Does anyone out there have any experience or advice to give me on the subject?

I am afraid that if we married her salary would count against me and I would not be eligible for Perkins loans, etc. Is this true? And if it is how much of a negative is it? Is it worth postponing marriage to save some dough? 😕

Anyone with knowlegdge on this subject please help!!

 

[med-i-cal]

Hey all!

I have been with my significant other for some time now and would almost positively be asking her to marry me soon if it were not for medical school and the possibility of her assets interfering with my loans/financial aid. 😎

Does anyone out there have any experience or advice to give me on the subject?

I am afraid that if we married her salary would count against me and I would not be eligible for Perkins loans, etc. Is this true? And if it is how much of a negative is it? Is it worth postponing marriage to save some dough? 😕

Anyone with knowlegdge on this subject please help!!

The loan situation changes greatly when you get to medical school. Starting this past year I believe the norm is now to get the Stafford loan, and another new federal sub loan (I think it's called the "Grad Plus" loan). Neither should be based on income, and you shouldn't be rejected unless you have absolutely abysmal credit (their standards are very lax for this loan).

If you do get married, just leave the loans in your name with your "other"'s name nowhere on it. That way if something happens to you, the balance should not get transferred, I do believe it gets absorbed instead.

Goodluck👍

 

[PassingDays11]

Thanks for the response med-i-cal. However, I already know a decent amount about the types of loans available for me.

Me - single:
I should qualify for subsidized loans (i.e. won't start accruing evil interest until repayment period begins) under the Stafford and/or Perkin's Loan programs. This should take care of $8,500 - $13,500/ year of cost.

I should also be able to pick up the rest with an unsubsidized Stafford Loan (interest accrues right away at around %6/year...ahhhh!).

Me - married:
I'm not sure if I would be able to have any subsidized loans with a wife that makes about 25K/year. If this is the case then $40,000/year at 6% interest over 4 years comes to about $17K that I wouldn't have had to pay back if I were still single. Take into account residency of about 5 years and that amount becomes about $38K more! *Please check my math*

The FAFSA requires individuals to list spouse financial information, so I'm not sure if there is a way to get around this.

If anyone knows anything about this, PLEASE POST AND HELP ME!!!

Anecdotal information or hard facts are appreciated.

Thanks all

 

[rgerwin]

$25K a year is not really income that would much against you.

 

[PassingDays11]

$25K a year is not really income that would much against you.

Thanks for the input. Are you speculating or do you know that for sure?

I know it's not a huge income but in order to get the subsidized loans one must have a certain amount of need. That need is calculated with the FAFSA.

Does anyone know how high the FAFSA Estimated Family Contribution (EFC) can be in order to still be eligible for subsidized loans?

 

[babyruth]

My husband is a student and only makes a GA stipend so we are still under poverty level. I have had no problem with getting government or private loans based on this measily income.

I am not sure about the actual amount for the EFC, but I don't think that your wife's 25K basically supporting both you and her would hurt you that much. Your best bet would be to talk to your school's financial office regarding the Perkins. They are probably more familiar with student rejections because they hear the complaints about it. You could also try the loan company that you go through to get the perkins loan, at least I think it goes through another company. I did my unsub and sub through Wellsfargo and I know others who went through Sallie Mae. I don't know if I would hold off marriage just for this fact, otherwise it would only be worth it if you held off for all four years. Sorry I couldn't be of more help but try and ask the experts first.

 

[rgerwin]

First, the EFC calculation has a certain amout of mystery involved. I don't think anyone is entirely clear on exactly how it is generated. However, I am fairly certain that 25K for 2 people would be considered super low.

 

[Krazykritter]

Thanks for the input. Are you speculating or do you know that for sure?

I know it's not a huge income but in order to get the subsidized loans one must have a certain amount of need. That need is calculated with the FAFSA.

Does anyone know how high the FAFSA Estimated Family Contribution (EFC) can be in order to still be eligible for subsidized loans?

$25K a year will NOT affect you. This is not speculation as that is also my situation. I believe that every med student qualifies for the Stafford loans of $8500 subsidized every year + Unsubsidized loans based on the number of months you are in school. For 10 months you end up w/ approximately $40K.

The good thing about being married is that we have been able to cover nearly all living expenses w/ my wife's salary (minus health insurance & her 401K). Living like a student has helped me to keep my debt low & still pay off my wife's student loans at the same time. It can be done, but you can't live like a doc yet.

 

[bananaface]

Moving to Financial Aid for the best response. 🙂

 

[alwaysaangel]

Thanks for the input. Are you speculating or do you know that for sure?

I know it's not a huge income but in order to get the subsidized loans one must have a certain amount of need. That need is calculated with the FAFSA.

Does anyone know how high the FAFSA Estimated Family Contribution (EFC) can be in order to still be eligible for subsidized loans?

I'm not positive. But most need-based loans and grants use the 200% poverty line as the barrier as to whether you get the help or not.

This year the 200% poverty level for a household of 2 is $26,400.

If both of your incomes will go over that, I would wait for the marriage.

If it won't - go for it. They really don't bother to measure people as any poorer than that.

 

[Mrs. MD]

My husband is a 4th year medical student. We got married halfway through his 2nd year. I make $31,000 a year, and this does not at all affect how much money he can take out. He takes out just as much now as he did before. I do believe that my info. is on his loan paperwork, but he has it set-up so that if something were to happen to him, I am not responsible for the loans. Hope this helps, just go ahead and get hitched 🙂

 

[dpmd]

If you were to get married, your spouses income would be included to determine your EFC. This would affect your eligibility for a perkins loan and subsidized stafford. My first year of medical school, I went in having an income of about 27K with some savings and a 20K scholarship. The budget at my school was about 60K (private school in a high cost of living area, plus they allowed for a computer purchase and a lot of books). That year I got my full subsidized stafford and a small perkins (1250). I got married that summer and my husband's income was 40-50K (although mine dropped to about 5K). I still got my full subsidized stafford but no perkins (though I did get a 6K institutional loan with no interest until post grad and 8% interest). When our combined income was over 70K was when I got a reduced portion of subsidized stafford (just a couple of thousand).

One other thing to keep in mind. While your potential spouse will add to your household income, she will also add to your household size. 25K is a really small amount for 2 people to live on. I think that would even get you the low cost phone and electric rates. I don't think that amount would adversely affect your subsidized loan amounts unless you go to a ridiculously cheap school (your financial need is the school budget minus your EFC). Hope this helps.