Student loans: Counting spouse's income

kelley198721 · December 2013

Since I got laid off, I had to put my loans on unemployment deferment. My loans are serviced by Nelnet. I was talking to a representative today about renewing my income based plan in February when my deferment runs out.

And the guy mentioned that if I still don't have a job by then, I can still renew my income based plan and my payments will be $0 for 12 months.

Then he dropped this on me. "Unless you're married, then it will count your spouse's income."

I was like "Whaaat?"

I guess I should have known this earlier but it never even occurred to me. I'm not even engaged yet but once SO and I get married, my payments will go up because it will also consider his income??

That sucks.

I thought when you got married, everything would be cheaper! Lol but I guess not.

Xstatic3333 · December 2013

It's true, but if you file taxes as single they'll only look at your income for IBR. You just have to see what makes the most sense for you as a couple-which may be paying your loans down faster. Hopefully you'll be well employed by then anyway so you can make the full payments.

lifeonthehill · December 2013

Well hopefully by the time you get married you will have a great job and be able to make the full payments!

H and I were dating when he deferred his loans(he was working 5 hours a week) and they asked if he was married because if he was he wasn't going to be able to. Thankfully we were able to stop them because at the time we could afford to eat let alone pay $480 out a month for SL.

vlagrl29 · December 2013

This is news to me. My loan repayment never went up and I've been married twice.

lifeonthehill · December 2013

vlagrl29 said:

This is news to me. My loan repayment never went up and I've been married twice.

Were you paying based on your income or just paying the regular minimum payment?

hoffse · December 2013

I've never done this, so I don't know if your tax status really matters. But if it does, do look at the other things that would happen if you file your taxes as married filing singly. It tends to be a lot more expensive than married filing jointly - and you typically don't qualify for a bunch of deductions when you file singly. Odds are you would spend less by just paying income-based minimums on your student loans if you qualify for a tax refund.

And while some things are less expensive when you are married, many things are more expensive. A lot of it depends on whether you've lived together before marriage.

Start looking for a job. I was under the impression that unemployment deferment lasted a pretty long time, so if that period is about to expire for you, you really should be seriously looking. You can't discharge student loans in bankruptcy - they need to be paid somehow.

Xstatic3333 · December 2013

Good point, @hoffse. H's loans are on IBR since they are our lowest-interest debt, but we're giving it up this year because the benefits of filing jointly are much higher for us (and, of course, because we're hoping to pay them off sooner than 20 years anyway).

vlagrl29 · December 2013

alyssa32713 said:

vlagrl29 said:

This is news to me. My loan repayment never went up and I've been married twice.

Were you paying based on your income or just paying the regular minimum payment?

I paid income based when I was in my first marriage after I got laid off, but since then I was paying my normal graduated loan payment plan.

lifeonthehill · December 2013

vlagrl29 said:

alyssa32713 said:

vlagrl29 said:

This is news to me. My loan repayment never went up and I've been married twice.

Were you paying based on your income or just paying the regular minimum payment?

I paid income based when I was in my first marriage after I got laid off, but since then I was paying my normal graduated loan payment plan.

Interesting. Maybe it is somehow based on loan company. Only one of his three loan companies asked about marital status when we tried deferred his loans.

Xstatic3333 · December 2013

I think it's possible, though don't quote me on this, that unemployment deferment doesn't depend on marital status but the size of your IBR payments does depend on joint income.

vlagrl29 · December 2013

I've never changed my last name on my loans since I got married. Mine are thru sallie mae. I'm remembering now that i deferred them when I was unemployed (married) and when I got a new job I made them income based and had to fax them a copy of my pay stub for proof (still married but separated). I don't know if this has been mentioned or not, but it's best not to consolidate your loans with your spouses loans because if your spouse passed away you would be responsible for his. If he keeps his separate you don't have to pay them off if he passed. I know it's morbid to think about, but it's good to know.

lifeonthehill · December 2013

vlagrl29 said:

I've never changed my last name on my loans since I got married. Mine are thru sallie mae. I'm remembering now that i deferred them when I was unemployed (married) and when I got a new job I made them income based and had to fax them a copy of my pay stub for proof (still married but separated). I don't know if this has been mentioned or not, but it's best not to consolidate your loans with your spouses loans because if your spouse passed away you would be responsible for his. If he keeps his separate you don't have to pay them off if he passed. I know it's morbid to think about, but it's good to know.

Good advice! I would never consolidate things like that together just in case. As much as you love someone and want to make things work you can't stop them from leaving if they choose so. Or stop the from dying.

Unfortunately if H died today his grandmother (co signer) would have to pay back about $5,000 because it would be her responsibility. Thankfully for her the other $11,000 is public aid loans and would be forgiven.

lifeonthehill · December 2013

vlagrl29 said:

I've never changed my last name on my loans since I got married. Mine are thru sallie mae. I'm remembering now that i deferred them when I was unemployed (married) and when I got a new job I made them income based and had to fax them a copy of my pay stub for proof (still married but separated). I don't know if this has been mentioned or not, but it's best not to consolidate your loans with your spouses loans because if your spouse passed away you would be responsible for his. If he keeps his separate you don't have to pay them off if he passed. I know it's morbid to think about, but it's good to know.

Good advice! I would never consolidate things like that together just in case. As much as you love someone and want to make things work you can't stop them from leaving if they choose so. Or stop the from dying.

Unfortunately if H died today his grandmother (co signer) would have to pay back about $5,000 because it would be her responsibility. Thankfully for her the other $11,000 is public aid loans and would be forgiven.

Xstatic3333 · December 2013

That is good advice, @vlagrl29. I actually thought the surviving spouse was responsible either way.

I consider myself pretty well-informed about my loans, but still learn new things all the time. They are tricky!

smerka · December 2013

Just so we're clear. If you are married, your filing status is either Married Filing Jointly or Married Filing Separately. Not single.

lifeonthehill · December 2013

smerka said:

Just so we're clear. If you are married, your filing status is either Married Filing Jointly or Married Filing Separately. Not single.

Yup.

Xstatic3333 · December 2013

alyssa32713 said:

smerka said:

Just so we're clear. If you are married, your filing status is either Married Filing Jointly or Married Filing Separately. Not single.

Yup.

Sorry that's my bad.

vlagrl29 · December 2013

alyssa32713 said:

vlagrl29 said:

I've never changed my last name on my loans since I got married. Mine are thru sallie mae. I'm remembering now that i deferred them when I was unemployed (married) and when I got a new job I made them income based and had to fax them a copy of my pay stub for proof (still married but separated). I don't know if this has been mentioned or not, but it's best not to consolidate your loans with your spouses loans because if your spouse passed away you would be responsible for his. If he keeps his separate you don't have to pay them off if he passed. I know it's morbid to think about, but it's good to know.

Good advice! I would never consolidate things like that together just in case. As much as you love someone and want to make things work you can't stop them from leaving if they choose so. Or stop the from dying.

Unfortunately if H died today his grandmother (co signer) would have to pay back about $5,000 because it would be her responsibility. Thankfully for her the other $11,000 is public aid loans and would be forgiven.

at least it's not more than 5k. My parents made sure to never co sign anything for me because they didn't want that responsibility. Luckily I've never needed a cosigner. One of my violin student's mother told me recently that they require cosigners in some instances for student loans which was also news to me because at 18 I had no credit to my knowledge and never needed a cosigner for my loans.

lifeonthehill · December 2013

vlagrl29 said:

alyssa32713 said:

vlagrl29 said:

I've never changed my last name on my loans since I got married. Mine are thru sallie mae. I'm remembering now that i deferred them when I was unemployed (married) and when I got a new job I made them income based and had to fax them a copy of my pay stub for proof (still married but separated). I don't know if this has been mentioned or not, but it's best not to consolidate your loans with your spouses loans because if your spouse passed away you would be responsible for his. If he keeps his separate you don't have to pay them off if he passed. I know it's morbid to think about, but it's good to know.

Good advice! I would never consolidate things like that together just in case. As much as you love someone and want to make things work you can't stop them from leaving if they choose so. Or stop the from dying.

Unfortunately if H died today his grandmother (co signer) would have to pay back about $5,000 because it would be her responsibility. Thankfully for her the other $11,000 is public aid loans and would be forgiven.

at least it's not more than 5k. My parents made sure to never co sign anything for me because they didn't want that responsibility. Luckily I've never needed a cosigner. One of my violin student's mother told me recently that they require cosigners in some instances for student loans which was also news to me because at 18 I had no credit to my knowledge and never needed a cosigner for my loans.

H grandmother had to cosign all of his private loans(he is 24 now and 18 when he went to college). We paid them off first so she would be off the hook.
You were lucky to not need a co signer and your parents were smart not to.

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