If you read the May edition of Atlanta Tribune, you know that we promised this online supplement to our “Navigating Student Loans” story on page 51. Part One introduced Income Based Repayment and answered basic frequently asked questions. Part Two addresses IBR requirements for married borrowers.
Income Based Repayment – Married Borrowers
Is my spouse’s income included in the determination of my eligibility for IBR?
Under the current IBR regulations, if you are married and file a joint federal tax return and you and your spouse both have eligible student loans, your eligibility for IBR will be determined separately based on your joint income. However, only your own individual eligible loan debt will be considered. For married borrowers who file separate federal tax returns, IBR eligibility is determined based on each individual spouse’s income and eligible loan debt.
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.
My spouse and I file a joint federal tax return, but my spouse does not have any IBR eligible student loans. Can my spouse’s other indebtedness be included in determining my IBR legibility?
Only eligible federal student loan debt is taken into consideration when determining your eligibility for IBR. Private loans and non-loan debt (either yours or your spouse’s) are not considered. In addition, if you are married and file a joint federal tax return with your spouse, only your own eligible student loan debt is a factor in determining IBR eligibility under current regulations.
My spouse and I have a joint consolidation loan. My spouse is not employed, but the majority of the joint consolidation loan is attributable to loans that were originally borrowed by my spouse.
Will the fact that my spouse has no income be considered when determining our eligibility to repay the joint consolidation loan under IBR?
If you and your spouse file a joint federal tax return, your combined income will be used to determine your eligibility for IBR and your IBR payment amount. Joint consolidation loan borrowers must each request IBR since both individuals are jointly responsible for the full amount of the loan. Each borrower’s eligibility for IBR is determined using joint income, the same family size, and the full amount of the joint consolidation loan.
My spouse and I have separate student loans, and my spouse’s calculated IBR monthly payment amount is $40/month. Does that payment also cover my student loans?
Spouses must apply separately for determination of eligibility for IBR and for calculation of each spouse’s IBR payment amount.
My spouse and I want to consolidate our loans together into a single joint consolidation loan and then apply for IBR. Is that possible?
The law no longer allows married borrowers to consolidate their loans together into a single joint consolidation loan. If you want to repay under IBR, you and your spouse must apply separately to your individual loan holders.