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REPAYE and Married Filing Jointly
December 1, 2015
12:29 pm
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BBE
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Hi. I really appreciate this website and the work you’ve done in putting it together/maintaining it. I have a quick question. I ran the numbers in your REPAYE calculator (to include my income only –since my wife doesn’t have an income as she is raising our little ones). According to the calculation, my new student loan payment would be approximately $385 (which is a couple hundred below my current IBR monthly payment for my personal student loans). However, the calculation also stated that the $385 would be the ‘total’ amount we would both pay (if my wife also entered the REPAYE program). To clarify, does that mean our combined total monthly payment for student loans would be $385? I ask because we both have a large student loan debt. My current paymnet under IBR is $561 and hers is $389 under the level 30 year plan. Thanks!

December 1, 2015
10:52 pm
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Indiana
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May 3, 2014
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Hi! Thanks for the kind words.

There is a bit to untangle in your question.

First, if your wife currently does not have an income, why is her monthly payment on IBR $389? It should be zero (but a lot of variables do come into play based upon how you file your taxes, and how you reported your income to your lenders and how you reported your student debt on her IBR application).

Your last sentence is also a bit concerning to me because there is no IBR “under the level 30 year plan”. IBR forgiveness actually triggers after 25 years, so I’m not sure where the 30 would come from, plus there is no “level” plan as IBR payments change each year based upon your income.

To answer your original question, if you did sign up for REPAYE, the combined payments for you and your wife would be based upon your combined incomes.

As a general matter, if you are on IBR and sign up for REPAYE, your payments should drop to about 2/3 of what you were originally paying. So if you were paying 150 per month, payments will drop to 100.

December 2, 2015
7:42 am
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BBE
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Thanks for the reply! Hopefully this will provide some clarity:

Me: I am on IBR. Current IBR payment is at $561 per month. I am the sole income earner.
My Wife: She is on the ‘extended payment plan’ ($389 per month). When she asked her loan servicer about switching to IBR they advised her payments would go up if she did so (apparently since we file jointly).

At any rate, according to your REPAYE calculator, if I switched to REPAYE, my monthly payments would drop by 1/3 (down to $384). If my wife also switched to REPAYE, would that be her monthly payment as well? ($384?) —-and our combined monthly individual payments would equal $768? (This question assumes we will continue filing taxes jointly each year).

Thanks!

December 2, 2015
8:04 am
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Indiana
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Forum Posts: 334
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May 3, 2014
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I see!

This question of yours just got very interesting, and I will have to do some more research in order to get back to you.

Here is the issue: Under IBR (for example) is the couple expected to pay 15% of their combined discretionary income towards student loans, or is it 30%?
– If what your wife was told is correct, it would be the 30%
– However, according to this page, http://www.ibrinfo.org/update_…..10.vp.html , The information your wife received is incorrect.
– Making things more complicated, if we look at the Federal repayment estimator, https://studentloans.gov/myDirectLoan/mobile/repayment/repaymentEstimator.action , it seems that it is the 30%… which would mean a HUGE penalty for married couples who both have balances when paying off their student loans.

Going back to REPAYE, we will have to investigate to see if the rules are the same for REPAYE as they are for IBR in this manner.

I’m going look into this further and get back to you in the next few days.

December 2, 2015
8:09 am
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Indiana
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Forum Posts: 334
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May 3, 2014
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I’ll also add my educated guess…

I think what your wife was told was wrong. I think that your combined IBR payments should add up to $561 or that your combined REPAYE payments should add up to 384.

To treat it any other way would amount to a huge marriage penalty for couples who both have federal student loans.

That all being said, there is some information out there that would indicate otherwise, so I can’t yet say for sure.

December 2, 2015
11:31 am
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BBE
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Thanks! I really appreciate it. I suspect my wife may have received inaccurate feedback from her loan servicer (ACS, btw).

December 3, 2015
10:28 pm
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Indiana
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Forum Posts: 334
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May 3, 2014
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Hopefully this article explains everything fully: https://studentloansherpa.com/ibr-married-couples-student-loans/

Thanks again for the great discussion!

December 7, 2015
3:26 pm
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BBE
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Excellent feedback! Thank you for the research and feedback!

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