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September 19, 2014

How Income is Established for Calculating Student Loan Payments

Submit the Income-Driven Repayment Plan Request online at studentloans.gov

If you have filed a federal income tax return in the past two years and the income on your most recent federal income tax return is not “significantly different” from your current income, you may use the IRS Data Retrieval Tool in the application to import the most recent year’s Adjusted Gross Income (AGI) into your application.  Your monthly payments will be calculated based on that AGI.

Married student loan borrowers can choose to either:

  • file taxes jointly and have monthly payment based on joint AGI and combined student debt, or
  • file taxes separately and have monthly payment based on individual AGI and individual student debt.  

If a married couple files a joint federal tax return, a total student loan payment amount for the couple will be calculated taking into account both spouses’ debt and both spouses’ income.  A proportion of the total payment will be assigned to each spouse based on their share of the couple’s total student loan debt.  

If you haven’t filed taxes or if your income is “significantly different,” you must provide alternative documentation of income. If you have no income or only untaxed income, indicate that and you will not be required to supply further documentation.  If you receive taxable income, you must submit a paper Income-Driven Repayment Plan Request with alternative documentation of your income, such as a pay stub.

Read more about Income-Driven Repayment Options.

By Heather | Category: Pay As You Earn, IBR, Student Loan Repayment  
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