Do You Get Money If You Get Married in College?

Marriage during college significantly reshapes a student’s financial landscape. It introduces new considerations regarding financial aid, student loans, and tax obligations. This shift in status can lead to both advantages and disadvantages, depending on the specific financial circumstances of both individuals.

Impact on Financial Aid

Getting married while in college changes a student’s dependency status for federal financial aid purposes, as defined by the Free Application for Federal Student Aid (FAFSA). Once married, a student is considered independent, regardless of their age or parental financial support. This reclassification means parental income and assets are no longer considered for federal student aid programs. Instead, the calculation uses the combined income and assets of the student and their spouse.

This change in dependency status can significantly alter the Student Aid Index (SAI), the number used to determine federal student aid eligibility. A lower SAI indicates greater financial need and can lead to more aid. If a student marries someone with little to no income or assets, their SAI might decrease, potentially increasing eligibility for need-based aid such as the Federal Pell Grant or the Federal Supplemental Educational Opportunity Grant (FSEOG). Conversely, if the spouse has substantial income or assets, the combined financial picture could result in a higher SAI, potentially reducing or eliminating eligibility for these grants.

Institutional grants and scholarships, awarded by colleges and universities, may also be affected by a change in marital status. While many institutions base aid decisions on the FAFSA and federal methodology, some have their own applications or criteria that might consider spousal income differently. Students should update their FAFSA information promptly after marriage to ensure their aid eligibility is reassessed. Timely updates allow financial aid offices to provide precise information regarding any adjustments to aid packages.

Student Loan Implications

Marriage affects the management and future eligibility of student loans, particularly federal loans. For federal student loans, combined spousal income is factored into monthly payments under Income-Driven Repayment (IDR) plans. Plans like SAVE, PAYE, IBR, and ICR use a borrower’s adjusted gross income (AGI) to determine affordable monthly payments. If a couple files taxes jointly, their combined AGI will be used, which could lead to higher monthly payments than if they were single.

Borrowers pursuing Public Service Loan Forgiveness (PSLF) rely on making qualifying payments under an IDR plan. An increase in monthly payments due to combined spousal income might lead to the loan being paid off faster, potentially reducing the amount forgiven at the end of the 10-year period. However, filing taxes separately could allow one spouse’s income to be excluded from the IDR calculation, potentially resulting in lower monthly payments and greater forgiveness under PSLF, though filing separately may have other tax disadvantages.

Becoming independent due to marriage can influence eligibility for certain types of future federal student loans. Eligibility for subsidized federal student loans, where the government pays the interest while the student is in school, is tied to financial need. While independence broadens access to federal student loans by removing parental income, the new combined spousal income will become the determining factor for need-based aid. Unsubsidized federal student loan limits are not tied to dependency status or financial need. Private student loans are not directly affected by marital status, as their terms are set by individual lenders based on the borrower’s (and any co-signer’s) creditworthiness and income.

Tax Considerations

Marriage introduces new considerations for federal income tax filing status, offering “Married Filing Jointly” or “Married Filing Separately.” Most married couples choose to file jointly, which results in a lower overall tax liability due to combined income and potential access to larger standard deductions or certain credits. However, filing jointly means both spouses are responsible for the tax return’s accuracy and any tax due. The “marriage penalty” or “marriage bonus” can arise where combined income pushes a couple into a higher tax bracket, or conversely, places them in a more favorable tax situation, depending on their individual income levels.

The choice of filing status can significantly impact eligibility for education-related tax credits and deductions. For example, the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC) have income limitations based on the taxpayer’s modified adjusted gross income (MAGI). If a married couple files jointly, their combined MAGI might exceed these income thresholds, potentially reducing or eliminating their eligibility for these valuable credits. Similarly, the student loan interest deduction, which allows taxpayers to deduct up to a certain amount of student loan interest paid, also has AGI phase-outs.

Filing “Married Filing Separately” might be an option if one spouse wants to preserve eligibility for certain tax benefits with strict individual income limits. For instance, if one spouse has very low income and the other has higher income, filing separately might allow the lower-income spouse to claim a credit they would otherwise lose if their income was combined. However, filing separately results in a higher overall tax burden for the couple compared to filing jointly, as some deductions and credits are disallowed or limited. The decision between filing jointly or separately requires careful consideration of both spouses’ incomes, deductions, and potential credits to determine the most advantageous tax outcome.