topic Re: Why am I included on spouses student loans? in Student Loans

Why am I included on spouses student loans?

CreditGuy03 — Wed, 04 Jul 2018 04:37:25 GMT

I never cosigned, never signed a promissiory note. My wife doesnt work. I pay all the bills including my student loans. So why are they trying to use my income to pay back her loans?

On what planet does filing taxes jointly make me liable for her debt? If she isnt working she should be eligible for a 0 dollar payment. Instead they are trying to hit her with a 557 payment

Re: Why am I included on spouses student loans?

RobertEG — Wed, 04 Jul 2018 22:35:31 GMT

How, specifically, are they trying to use your income to pay her loans?

Are they asking, for example, that you authorize payments from your bank account or to your personal credit card?

Re: Why am I included on spouses student loans?

CreditGuy03 — Thu, 05 Jul 2018 00:55:28 GMT

They are basically saying to my wife since you aren't working we are going to use your husband's income to calculate your payments because you have access to his money because you filed married filing jointly.

This is asinine

Re: Why am I included on spouses student loans?

Erick12 — Sat, 07 Jul 2018 15:45:02 GMT

Spousal income is used when calculating income based repayment. They are not making you responsible for her loan, they are saying your income is used when calculating this benefit.

Re: Why am I included on spouses student loans?

CreditGuy03 — Sat, 07 Jul 2018 16:07:10 GMT

Exactly so if she isn't working and they made the payment 500 based on my income. Who do they expect to pay it?
They expect her to pay it with my income.
It all comes back to me.

Re: Why am I included on spouses student loans?

beutiful5678 — Sun, 08 Jul 2018 06:41:43 GMT

If you file your taxes separately as Married, filing Separately then you could use only her 'income.' I presume they reason that since you file jointly that you have joint finances.

ETA: They will base her IBR payment on your joint income if/when she starts working again, as well. If you want payments just on her income then you have to file separately.

Re: Why am I included on spouses student loans?

CreditGuy03 — Sun, 08 Jul 2018 20:27:07 GMT

That's crazy

Its a catch 22. If you file jointly you get all the tax benefits especially if you own a home. If you file separately you dont get those tax benefits.

Then if you file jointly they lump you both together on student loan repayment which is just dumb

Re: Why am I included on spouses student loans?

beutiful5678 — Sun, 08 Jul 2018 20:35:58 GMT

I agree. Unfortunately, there's not much in the U.S. system of financing higher education that makes sense.

Re: Why am I included on spouses student loans?

Anonymous — Mon, 09 Jul 2018 15:44:56 GMT

I'm not sure that's entirety accurate for federal loans.
There are 4 income-driven repayment plans. The REPAY plan is very popular because it takes only 10% of discretionary income but the downside is that if you are married and file jointly you have to use the income for both people.
However, the Income-based repayment plan will take 15% if they borrowed pre- July 1, 2014 and 10% after. It might seem like a "higher" payment but it will only include their income. In fact, the payments will be $0 and and loan forgiveness in 20 years. In your spouses case you'll likely want to upload the application to your loan servicer because the online application will probably keep bumping you back to the IRS site. Sometimes selecting the lowest payment plan option on the income-driven repayment plan application also allows the servicers to just do whatever they want I've found so select a specific plan.
Here is the explanation on the gov website:
https://studentaid.ed.gov/sa/repay-loans/understand/plans/income-driven
Let me know if you have any other questions; I've walked several family members through this overly-complicated process.
Hope this helps!

Re: Why am I included on spouses student loans?

Anonymous — Wed, 11 Jul 2018 18:27:53 GMT

Why would they exclude your income ? You are married . She has debt and she choses not to work, who did you think would pay her debt? What would happen to the student loan percentage payment program if every person who got married had one partner quit and pay nothing ?

Re: Why am I included on spouses student loans?

CreditGuy03 — Wed, 11 Jul 2018 18:36:24 GMT

Ok i will try for income based repayment. I think my wife selected the option "let my servicer choose the best option" when she applied

Re: Why am I included on spouses student loans?

Anonymous — Thu, 12 Jul 2018 13:40:39 GMT

Nursemanit: First off, not everybody is married when they get student loans. In fact, I would guess most people have to put it off marriage until after school is done. Second, most people work. Most people who do not take temporary leave, such as from unemployment, disability or having kids. It makes zero sense to stop working for 20 years just to avoid making payments on a student loan!! It also makes no sense to think there are a bunch of people out there just itching to spend their time getting a degree then never use it, so much that so much so that this it will doom the student loan system.
The student loan system is doomed however because the current system is unsustainable. People have to take out a increasing mountain of debt nowadays with astronomical interest rates, but there is a wage stagnation. Additionally a bachelor's degrees is no longer a thing you get to be ahead in the workforce, it's what you get and still have a problem getting a job.

This person is asking for advice on how to fix a problem in a way that lenders allow them to. It's wrong for you to attack them for wanting to do so.

Re: Why am I included on spouses student loans?

Anonymous — Sat, 14 Jul 2018 02:44:42 GMT

Sabi - You are making many false assumptions.

1. It makes no difference if you took the student loan before you are married vs. after. And the OP is questioning why they can not claim $0 in income and not pay the loan. There is a simple concept that seems to be lost to many people. You borrow money that means you must pay it back. If you don't then "we" meaning everyone else has to pay it for you. There should not be loopholes that leave it to other to pay your loans.

2. We have less than 4% unemployment - and wages are no longer flat like they were from 2009. Yet despite this student loan defaults are rising. I agree that colleges are quite drunk on spending and the costs are out of control however 100% of people who take out student loans since 1990 were provided estimates of what the monthly payments would be post graduation and the interest rates. Knowing this they signed for the loan promising to pay the money back . No one was tricked into student loans.

3. The interest rates on student loans are very low. Show me one unsecured loan you can get at a better rate than a student loan. It is not the student loan program or the interest rates -but the modern feeling of entitlement that is causing the student loan crisis.

4. A 4 year degree is still a valuable tool and you should be able to get a job in a market with sub 4% unemployment. You may not get that job you dreamed about but you can get a job. I live in one of the most economicaly depressed areas of the country. I only have a 4 year degree yet if I lost my job I would estimate that it would take less than a month to get a new one. Heck, I could get a job in a day but it would be about a month before I got my first check. I am confident of this because I obtained a degree that is marketable in any economy instead of a fun degree that was less marketable. It is not the governments fault if you take out 60,000 in loans to get a degree in a dead or non - marketable field.

Re: Why am I included on spouses student loans?

beutiful5678 — Sat, 14 Jul 2018 03:20:10 GMT

I don’t think the OP was looking for anyone to pontificate on his desire to make use of the various income-driven repayment plans available nor his and his wife’s choice for her to be a stay at home spouse.

Re: Why am I included on spouses student loans?

UncleB — Sat, 14 Jul 2018 15:09:04 GMT

@beutiful5678 wrote:
I agree. Unfortunately, there's not much in the U.S. system of financing higher education that makes sense.

When I was 20 years old I was working two part-time jobs and living on my own - even helping my parents at times - yet I still had to include their income on my FAFSA as if my family was helping me and it was figured in when calculating my financial aid.

At the time I felt there was nothing fair about it - I was getting zero financial support from my family - but that's what I had to deal with. (FWIW I still feel it's not a great way to do things.)

In my case the damage wasn't too bad (my family doesn't have much) but for young people who have wealthy parents who refuse (for whatever reason) to assist them financially with school it's really not fair. In that case short of getting married you just have to 'deal with it' until you're 24, which could mean someone putting off higher education altogether for literally years.

I realize that isn't what this thread is addressing, but I just wanted to point out that not everything is as you might think it 'should' be with financial aid, student loans, and repayment.

@CreditGuy03, if your wife's repayment schedule is causing a financial hardship I highly recommend having her reach out to her servicer as soon as possible. Several times I saw that I would be running short, and my servicer was always able to help me make an arrangement (twice I was able to get a forbearance) to help me get back on track.

I always called before there was a problem (I hadn't been late yet) and I found them to be easy to talk to and deal with. You won't know what options are available until you call and ask.

Re: Why am I included on spouses student loans?

Anonymous — Sun, 15 Jul 2018 12:53:42 GMT

beutiful5678 Yes that is exactly what the OP is asking for.

uncleB - this is not really true , your parents income affects pell grants and subsidised loans - it has no bearing on traditional student loans. There is no reason to put off school untill you are 24. I was in the situation you descibed and recieved nothing from my parents for college yet was able to pay using student loans loans and working part time.

Re: Why am I included on spouses student loans?

UncleB — Sun, 15 Jul 2018 13:44:42 GMT

@Anonymous wrote:
beutiful5678 Yes that is exactly what the OP is asking for.

uncleB - this is not really true , your parents income affects pell grants and subsidised loans - it has no bearing on traditional student loans. There is no reason to put off school untill you are 24. I was in the situation you descibed and recieved nothing from my parents for college yet was able to pay using student loans loans and working part time.

I was speaking specifically to subsidised loans and grants; my freshman year was before the law changed and I qualified for sufficient grants to cover almost everything. The next year the rules were different and my parent's resources had to be provided. With this change everything turned to loans only, some subsidised, and some not. Speaking as one who had the 'privilege' of paying off all those loans I can assure you there is a meaningful difference. Also, my parents were fine with providing information for the FAFSA; some aren't so lucky (which is a whole 'nother issue).

As for putting off school until 24... I agree that's not for everybody. I was just pointing out the lack of fairness in forcing a 18-year old to take out expensive loans while a 24-year old with the same income would likely qualify for grants.

In any case, I was trying to draw a parallel to the OP's issue, not start a separate topic.

Re: Why am I included on spouses student loans?

Anonymous — Sun, 29 Jul 2018 10:17:28 GMT

You clearly must have missed OP’s commentary on the IDR payment system. If his wife isn’t working why should he have to pay for her debt...

IMO, maybe Congress should eliminate the IDR and PSLF program for future borrowers. Then everyone (Future borrowers) would have no choice to but to pay back their full student loans.

Being able to pick and choose which debt you pay back isn’t the way the system works. Be thankful Congress established IDR as a method of a reduced payment.im very thankful and don’t complain about my or my spouse’s payment.