IBR Double Counting for two married residents

[McP]

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Has anyone else run into this?

My husband and I are both residents (Surgery and Peds). Combined we have a half million dollars in student loans that are going into repayment. I went through the IBR calculator because full payments on these loans is not a reasonable option for us. It turns out that the IBR calculations count the household income for each individual but not the household student debt. If we were single our repayment would be $290/month each but because we are married, our repayment is $850/month each. That's $1000 more a month.

The website acknowledges that this is "unfair and inappropriate" but will not be revisiting the issue until July of 2010.

We can't afford an extra $1700/month on top of mortgage, bills and food. I haven't talked to the loan companies yet (will call tomorrow) but I think our only option is forbearance until I finish residency and get a real job.

Is any one else in a similar situation? And has anyone else heard anything more promising from the Dept of Education?

Finally, should I divorce my husband even though I really like him and we are about to have a baby? (kidding...)

 

[TMP-SMX]

Your only option if you can't afford IBR (I'd reconsider your inability to pay as it is the best option) is to go into forbearance keeping in mind that you need to be making some kind of payments so that your interest doesn't balloon out of control. Also keep in mind that with forbearance your interest is capitalizing yearly.

In July 2010 they are changing the IBR calculation of payments based on debt and income.

 

[McP]

I am aware of the negative side effects of forbearance. It is not what I want to do. We have been planning on doing IBR this whole time, but that was with the understanding that our payments would be 10-15% of our income, not 30%. $1700 is like a second mortgage payment.

I wonder how long it will take for a revised policy to go into place. Perhaps we could forbear for a few months and apply for IBR when there is no longer a penalty for being married.

 

[illegallysmooth]

I am aware of the negative side effects of forbearance. It is not what I want to do. We have been planning on doing IBR this whole time, but that was with the understanding that our payments would be 10-15% of our income, not 30%. $1700 is like a second mortgage payment.

I wonder how long it will take for a revised policy to go into place. Perhaps we could forbear for a few months and apply for IBR when there is no longer a penalty for being married.

I read on one of those websites (finaid or something) that in order to make payments like single people, you have to file as single people for the purposes of income taxes. Doing this, you give up tax credits for married folks. So you have to weigh your options and see which situation will end up better off for you.

I can't believe that it counts the married income but not married debt (well, actually I can believe it. I'm not surprised by anything the government cooks up these days.). I mean, it's just so completely idiotic, especially considering that there are tons of married professionals who would both have student loan debt.

 

[ppisklak]

Luckily, the spousal income rule will be changed as of July 1st, 2010.

"Under changes made to the IBR regulations that will take effect July 1, 2010, married borrowers who
file joint tax returns and who both have eligible student loan debt will have their individual IBR eligibility
determined based on their joint income and the combined eligible loan debt of both spouses. [January
5, 2010]"

Source : http://studentaid.ed.gov/students/at...3109_FINAL.pdf

 

[Green Grass]

Sorry to rehash a nearly two year old thread, but does anyone know is this issue was resolved?

I called Direct Loans 4 times today and got 4 different responses.

 

[Green Grass]

Anyone? anyone? Bueller?

 

[toothless rufus]

Luckily, the spousal income rule will be changed as of July 1st, 2010.

"Under changes made to the IBR regulations that will take effect July 1, 2010, married borrowers who
file joint tax returns and who both have eligible student loan debt will have their individual IBR eligibility
determined based on their joint income and the combined eligible loan debt of both spouses. [January
5, 2010]"

Source : http://studentaid.ed.gov/students/at...3109_FINAL.pdf

What if I have debt and my wife has absolutely no debt?