I’ve been on IBR for a few years now and have been filing married separately and provide alternative documentation of income (paystubs) to Fedloan. This year I did the same and my IBR amount doubled. My salary did go up about 20%, but did not double. I was told on the phone that they looked at my gross amount on my paystub and not my net pay on the paystub. Since they view my “adjusted” gross income on my tax return shouldn’t they be looking at my net pay (which I think is similar to “adjusted income”) on the paystub? Haven’t found any literature stating that they must look at my gross pay on the paystub instead of the net pay. That seems to do a disservice to those of us who want to show alternative documentation of income. Any thoughts on what they look at when they view the paystub? Thank you!

AFAIK, if you provide alternative documentation of income, they go by gross amount, because they can’t/won’t assume what your AGI will be as that’s the job of the IRS. Why do you need to provide alternative docs of income? If you are married filing separately, I would think that you could just submit your previous tax returns and then it could go by AGI.

Also, there are other calculations at play based on poverty level, etc. You can see this if you go to an IBR calculator and put in $50000 total income for a family of 4. Your payments would be around $170. Let’s say you get a 50% raise the next year, and you make $75000. You’d think your payments would go up by 50%, but they actually go up to $482….more than double. So, tax brackets are also a consideration…

AGI and net are two very different things, which you should learn about in order to decide which income documentation will be most favorable for you