You got married, but there’s one more thing on your newlywed to-do list: student loan debt. Finding out the loan type, balance, monthly payment, payment history, and payment status for both of your loans should be your first priority. Next, discuss your student loan repayment plan. Your recent marriage status could affect your payment amount if you’re repaying under an income-driven repayment plan.
You have more than one way to repay.
You have several ways to repay your federal student loans. These strategies include.
When it comes to an income-driven repayment (IDR) plan, which we’ll cover later, it’s crucial to do the math with your spouse.
Your income tax filing status affects the amount you repay.
Either you and your spouse can file a joint income tax return, or you can file separately. Under most IDR plans, we will generally.
However, in order to continue on an IDR plan, you must recertify your income and family size each year.
The income we use to determine payments for each individual repayment plan, as well as whether you are married filing jointly or separately, is shown in the table below.
| Repayment Plan | Income Considered When Married Filing Jointly | Income Considered When Married Filing Separately |
|---|---|---|
| Revised Pay as You Earn | Joint Income | Joint Income |
| Pay As You Earn | Joint Income | Individual Income |
| Income-Based Repayment | Joint Income | Individual Income |
| Income-Contingent Repayment | Joint Income | Individual Income |
Under most IDR plans, we’ll reduce your payments to account for your spouse’s student loan debt if you file joint income taxes.
We typically take into account your spouse’s federal student loan debt and prorate your payment based on your share of the total federal student loan debt whenever we use joint income to determine your payment amount.
For the record, your spouse will not have to follow the same repayment plan for their federal student loans as you do.
Here are some examples.
Say you and your spouse file a joint income tax return. You don’t have children and reside in one of the 48 contiguous states. Your combined adjusted gross income is $100,000.
Payments are 10% of your discretionary income under the Pay As You Earn (PAYE) program. That works out to $604. 46 per month.
| Pay As You Earn (PAYE) Plan Combined Income | |
|---|---|
| Combined Income | $100,000 |
| 2022 HHS Poverty Guidelines for Household of Two | $18,310 |
| 150% of the 2022 HHS Poverty Guidelines for Household of Two | $27,465 |
| Discretionary Income (Combined Income Minus 150% of the HHS Poverty Guidelines Amount) | $72,535 |
| 10% of Discretionary Income | $7,253.50 |
| Pay As You Earn Monthly Payment (10% of Discretionary Income Divided by 12) | $604.46 |
Let’s say you owe $60,000 in federal student loans and your spouse owes $40,000, for a combined debt of $100,000. In other words, you and your spouse each owe 60% of the total amount of federal student loan debt. To determine your prorated payment amount, proportionally divide your monthly PAYE. In this case, 60% of $604. 46 would give you a monthly payment of $362. 68.
Your spouse will pay $241 if they independently apply for the PAYE plan, which they must do to enroll. 78 per month. Your calculated payment of $362 won’t change if your spouse selects a different repayment strategy; however, their payment may vary. 68.
But what if my spouse doesn’t have federal student loans? I can hear you asking. In the case of the combined income example, that $604 You owe the total amount of your federal student loan debt, which is 46, so that would be your payment.
Your payment only takes into account your $60,000 income if you and your spouse file separate income tax returns. Under PAYE, you would pay $271. 13 per month.
| Pay As You Earn (PAYE) Plan Separate Income | |
|---|---|
| Your Income | $60,000 |
| 2022 HHS Poverty Guidelines for Household of Two | $18,310 |
| 150% of the 2022 HHS Poverty Guidelines for Household of Two | $27,465 |
| Discretionary Income (Combined Income Minus 150% of the HHS Poverty Guidelines Amount) | $32,535 |
| 10% of Discretionary Income | $3,253.50 |
| Pay As You Earn Monthly Payment | $271.13 |
Finally, we will use your combined income to determine your IDR payment if you choose PAYE, IBR, or ICR and file a joint income tax return with your spouse—or if you choose REPAYE (regardless of whether you file jointly or separately)
Consult a tax or financial advisor before making any decisions about how to file your taxes.
You can file a separate personal income tax return to make sure that only your income determines your payment if it appears that your combined income is disadvantageous. However, you should speak with a tax expert and take into account your overall financial situation before selecting that option.
Because of this, some IDR plans may be more affordable if taxes are filed separately, but doing so may result in higher taxes and the loss of certain benefits, such as the following:
Consult a tax or financial advisor for guidance because it can be challenging to determine whether the tax benefits you lose are worth the money you could save on your monthly payment.
Your financial future will change as a result of marriage in many different ways. Make sure to discuss student loan debt as you combine and plan your finances. Your credit history, credit score, and discretionary income, as well as your future goals, can be impacted by student loan debt.
FAQ
Is student loan forgiveness based on joint income?
Let’s say, for illustration, that one spouse earns $150,000 while the other earns $60,000 They qualify for forgiveness based on their $210,000 joint income. However, the income of the higher-earning spouse exceeds the $125,000 individual cap.
Do married couples both get student loan forgiveness?
If you filed jointly, both spouses would be qualified if your combined income was under $250,000. Both spouses will be qualified if you are married but did not file jointly and your individual income is less than $125,000 annually.
Does filing jointly affect PSLF?
By filing your taxes separately, a married couple working toward PSLF can lower their monthly payments right away. If your spouse owes nothing, this works with the PAYE or IBR plans. By employing this strategy, you can reduce your income by excluding your spouse’s earnings.
Can spouses qualify for student loan forgiveness?
Yes, but in order to be eligible for the full loan forgiveness after making 120 qualifying payments, you and your spouse must both have been working full-time for a qualifying employer at the time of each payment.