Spouses with different plans

[Yellow mellow]

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My student loan debt is close to 400,000 while my husband has a 100,000 student loan debt. My income is significant higher than his since he is not a physician. We are currently both making repayments through IBR. Late this year or early next year, I'm looking to switch over to REPAYE which is the new version of PAYE that will allow borrowers who have loans before 2007. This new version comes with conditions. One that may affect us is that even if we filed separately, his monthly repayment will include both of our income.

So my question is should we file separately, understanding that we will loose out on some benefits but if he remains under IBR, his payment will be significantly lower with an income of 40G. For myself, I will switch over to REPAYE which will include my husband's income but I will be responsible for 10% instead of %15 and after working for non-profit for ten years, hopefully I will be able to utilize PSLF. Does this sound like a good plan ?

Hope this not too confusing what I've written.

 

[RangerBob]

You also could both switch to the new REPAYE.

Keep in mind that while the monthly repayment calculated includes both of your incomes, you should also be submitting proof of your spouse's loans to your loan servicer when you apply for your yearly IBR/PAYE payment calculation, because they take your spouse's loans into account (ie, they calculate the total payment your family should make, then calculate your portion based on your share of the loans).

(ie., my monthly IBR payment is about 3/5 of what it would be if I filed separately because only 3/5 of the loans are mine--the other 2/5 are my wife's. So the two of us are together paying a total of approx 15% of our combined AGI towards our loans.)

 

[Yellow mellow]

You also could both switch to the new REPAYE.

Keep in mind that while the monthly repayment calculated includes both of your incomes, you should also be submitting proof of your spouse's loans to your loan servicer when you apply for your yearly IBR/PAYE payment calculation, because they take your spouse's loans into account (ie, they calculate the total payment your family should make, then calculate your portion based on your share of the loans).

(ie., my monthly IBR payment is about 3/5 of what it would be if I filed separately because only 3/5 of the loans are mine--the other 2/5 are my wife's. So the two of us are together paying a total of approx 15% of our combined AGI towards our loans.)

Maybe I'm not understanding you correctly but if my husband switch over to REPAYE, his payment will include my income which is much more than his alone making his monthly payments much higher maybe than if he were to only use his annual income. That's why we were planning to only have me switch because his income is lower than mine so even when it is factored in, it won't be that significant I don't think.
Am I missing something ?

 

[Yellow mellow]

But thank you Ranger Bob for at least responding to me, I was beginning to wonder if anyone was going to give me any advice.

 

[RangerBob]

Maybe I'm not understanding you correctly but if my husband switch over to REPAYE, his payment will include my income which is much more than his alone making his monthly payments much higher maybe than if he were to only use his annual income. That's why we were planning to only have me switch because his income is lower than mine so even when it is factored in, it won't be that significant I don't think.
Am I missing something ?

Basically, both your payments are taken into account for a "total household payment." At least that's how they've done it for my wife and I--she uses our joint tax return, and if I had no loans then she'd have to pay, say, $600/month. But since I have 2/3 of the loans, her payment is $200/month and mine is $400/month. But you have to provide your loan servicer with proof of your spouses current federal loan burden (though when she reapplied last month, her servicer said they automatically look that information up now. And based on her repayment amount, they definitely took my loans into account).

I would assume REPAYE would work the same as this, but I haven't looked into the details of it.

 

[Yellow mellow]

Well since both my husband and I are on IBR, our loan amount are already in the system so when we do answer yes to whether our spouse have school loans it's convenient I suppose. But I get where you're coming from and I think ultimately, we both will switch over yo REPAYE if it becomes available in 12/2015. For us 10% is better than 15% for now at least till we can afford to pay more into our debts.