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Married and One Spouse Applying for IBR
March 7, 2016
10:44 am
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MarriedWithLoans
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I have about 5 years left on my student loan payments (10 year, level). I have been paying total $530 a month across all my accounts.
My wife just finished graduate school and we haven’t paid much on her loans. They are now due and are scheduled to be about $435 (10 year, level).
Currently, I make about 60k AGI and she makes about 5k AGI. She is a teacher and doesn’t work over the summer (should get some money for unemployment). We have always filed our taxes jointly.

Under the IBR plan, our 15% discretionary income would result in a total monthly payment of no more than $437. I wasn’t sure how it works if one spouse is on an IBR and one spouse isn’t. I thought that if I wasn’t on the IBR and am paying $530 (which is over the 15% cap), if my wife was to get onto an IBR plan, she wouldn’t owe any money? Is that accurate or do both spouses have to be on an IBR? One customer service rep told me that while our debt and incomes are looked at, if I chose not to get onto an IBR I would still owe $530 + her IBR of about $200 a month ($730 total, 25% discretionary income).

I’m just trying to figure out the best approach to our student loan situation. I have no problem making the $530 payment for myself, but we can’t afford another $435 on top of that. I really don’t want to get on an IBR plan for myself, as I am almost half-way to paying off my loans.

March 7, 2016
8:58 pm
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Indiana
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Based upon what you are saying, my first question would be why not both sign up for IBR?

From the sounds of things, going this route will mean your combined monthly payments are $437. (How this is split will depend upon your loan balances).

The fact that you want to continue paying the $530 a month is great, and signing up for IBR does not limit this ability. The IBR payment is the MINIMUM you can pay. Not the max. Thus, if you sign up for IBR and your payment is lowered to $200 per month, you can still pay $530 per month and pay your loan off as planned. Better yet if you need a little extra money one month, you have that flexibility. The key is to keep the self control to make the payments of $530 per month.

You can also contact your servicer and have them run some numbers for you so you get an idea of what the payments look like in a couple different circumstances:
– She signs up for IBR, you stay where you are
– You both sign up for IBR
– You stay where you are, she signs up for IBR, but you file taxes separately

To make matters even more complicated, you two may also want to look at the REPAYE plan. It is the newest federal repayment plan designed specifically for people paying 15% discretionary on IBR. It lowers that number to 10%. More on it here: https://studentloansherpa.com/repaye

March 8, 2016
2:23 pm
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MarriedWithLoans
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I really didn’t want to get on an IBR as I am halfway thru my 10 year level payment plan. Getting on an IBR would stretch my payments out another 14 years. Just seems like the 5 years i’ve been paying would have been a complete waste. I like the fact they are trying to help people pay loans in reasonable amounts, but the thought of having to still pay my loans and my wife’s loans when my daughter will be starting college is disgusting. And stretching out payments costs more because you are paying interest longer.

According to the StudentLoans.gov website, only 2 of my 10 loans are eligible for the REPAYE program. I think i would have to get them consolidated in order for all of them to be eligible?

March 8, 2016
7:55 pm
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Indiana
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I’m a little confused on why switching to IBR would stretch payments 14 years. Even if your payment is lowered on IBR, can you just keep paying the $530 per month and pay it off as planned?

As for REPAYE, I’d suggest calling your lender rather than basing it on the studentloans.gov website. It is a new repayment plan.

March 9, 2016
7:57 am
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There is no way I would be able to keep paying the $530 I currently pay for my student loans, then pay whatever amount my wife will owe per month ($435 level, about $200 IBR). If I get on the IBR as well and lower our total combined payment to $437 a month, it would essentially take me an additional 14 years to pay off my portion assuming we are just paying the minimum amount for both IBR plays. If I wanted to spend no more than $530 a month on my loans, I think all I would be able to do is put $100 or so towards my portion of the loans and pay it off a little sooner.

Honestly, the best option would have been to file our taxes separately for this year, but that ship has sailed and there really is nothing I can do about it now. If her work situation doesn’t change this year, then I will certainly look into it.

I tried calling Great Lakes but they made me even more confused than what I was before. Somehow, one of my plans magically switched over to an ICR plan on my account, but they have no record of me applying (studentloans.gov said they never transmitted any information from me to them). I looked at my wife’s application and she said that she didnt want to do any ICR jointly with me.

March 9, 2016
9:30 pm
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Indiana
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That makes sense. I now understand where you are coming from.

Filing taxes separately is definitely an option that would help with this issue. The downside is that your tax bill for next year will be higher. If you use tax software, you might want to run it both ways just to see what the cost difference would be.

The ICR stuff definitely sounds like an issue. If you are on ICR you will be paying 20% of your discretionary income towards the loans instead of the 15% required by IBR. It sucks that they created this issue for you. Sadly it is all too common. I had a similar issue with my loan servicer, myfedloan. I didn’t really get help until they “escalated” the issue to a supervisor. Once the supervisor was convinced it was a processing issue on their end and not an error on my part, they quickly got things fixed.

March 10, 2016
8:50 am
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So I have loans serviced by AES, Navient and Great Lakes. Only one loan account on my Great Lakes account has been changed to an ICR. That particular loan I am paying $162.06 a month. With this new ICR plan I somehow ended up on, they say I will now owe $94.64 a month for the first year, then 56 payments of $106 after that. That makes no sense to me because they are showing me that I will still have it paid off in 6 years (68 payments).

My wife’s navient account is still showing that all of her loans are on a level repayment plan. Her Great Lakes account is showing that she has no payments due and no payment schedules on her account, but her IDR request has been approved, so I am not sure what is going on with that.

March 10, 2016
8:48 pm
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Indiana
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I’ve never understood why one person has to have their loans serviced by three different companies. It creates a huge headache for you and the government pays three companies to do the work of one. Have you determined if the ICR issue is with just one company or are you having the same issue with all of them?

Did your wife just graduate? Often the loan servicers will hold off on starting repayment until the 6 month grace period is over. It could explain why you are seeing what you are.

March 11, 2016
8:51 am
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As far as my ICR issue, so far it appears to just be with Great Lakes. I am trying to wait until my wife’s accounts get updated with the IBR stuff before I call and complain. Her Navient account is still showing the Level repayment option (the last message from them said they received the IBR Request, but i guess they haven’t processed it yet).

My wife had actually been unemployed for over a year (spend time with the newborn). She was taking graduate classes partly while being unemployed. After the 6 month grace period ran out, she put her loans into deferment for being unemployed. She started a part time, 4 day a week substitute teaching job right when school started, so the 6 month deferment for unemployment just ran out. That was another concern I had. When June comes, she will be unemployed again and won’t be bringing in any money. She doesn’t get a lot of money now for what she does, so I didn’t want to be over the top with student loan payments. She should be eligible for unemployment, but that won’t be a huge amount.

March 21, 2016
3:39 pm
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MarriedWithLoans
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Navient seems to be taking their good ole time with processing the IBR Applications. I submitted mine last week for myself and they already processed it and sent me my updated payment schedule. 2 of my loans are on the IBR plan, and the other loan is on a REPAYE plan.

How long should I wait until I follow up with Navient? My wife, it has been over 2 weeks and nothing has changed on her account. There is a message that says they have received it, but nothing indicated it was processed (and the payment hasn’t changed).

March 21, 2016
10:16 pm
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Indiana
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3 to 4 weeks is pretty standard to process an application. I’ve also heard that application times are taking even longer right now because so many people are signing up for REPAYE. That being said, there is no problem with giving them a call to check in on the progress.

However, I’m a little confused why some of your loans would be on IBR and another on REPAYE. Why not just do REPAYE for all of them?

March 22, 2016
8:16 am
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I am not sure. I just checked the box to sign up for whatever was the lowest monthly payment. Some of my loans were from when I was in undergrad, some were from graduate school, so I think it has to do with the time the loans were taken out? I read online somewhere that if I consolidated those loans, I should be able to get them onto REPAYE?

Great Lakes literally took days to process. Navient seems to be taking their time, but at least they sent me an email saying they received my application. AES, nothing.

March 25, 2016
8:30 am
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So I contacted Great Lakes about a couple things. Long story short, I ended up completing the paperwork to consolidate my two loans that were being serviced with AES. These were some old FFEL Consolidation Loans from my undergrad . They said that I would be eligible for the REPAYE plan with these loans, but they had to be consolidated first. I completed the paperwork and requested that Great Lakes service them. Great Lakes, in my experience, seems to be the best company to work with (main reason, it took them days to process my IBR request, and I am still waiting on the others). This will give me now only 2 loan services (great lakes, navient). My Navient loans are only like $900, so by next year I will be down to just Great Lakes.

Th e other Great Lakes loans that are not on the REPAYE plan are in a similar situation. They would be eligible if I complete the consolidation request. At this time, I really just want to focus on getting away from AES and into an IBR plan on those loans.

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