Hello!
Hoping I could get some advice while I am in my fact-finding phase:

Here’s some background info: I have 82,000$ worth of Federal Loans, (my wife has no loans, thankfully) and will be entering repayment in the end of August.  We got married in August 2012 (Massachusetts residents), and I acquired all loans before we got married.  These loans are split between two major loan servicers, for about 60K to one servicer and 20k to another.  I have been exploring repayment options, as standard repayment for the larger of the two sums is 901$ and very unaffordable (which doesn’t even cover the other loan servicer’s amount, so reallly about 1,300/month).  I make 32,000$/year but have only been at my job for 8 weeks.  Before that, while in school, I had an unpaid internship and my last year’s AGI was 19,546$.  If I input this AGI and the fact that federally, I am “single”, my IBR is 0$.  On the federal IBR repayment application, it asks if your income is “significantly different then last years AGI”.  I don’t see a difference of roughly 12k significant, but if so, it jumps me to 109$/month, which is still doable.  If i factor in my wife, (due to DOMA potentially?) her income is 38,000, plus my income currently, my payment jumps to 600$/month.  We do not make enough to cover a 600$ IBR payment, our rent/car payments/cost of living, we are scraping by as it is due to living with credit cards during my last year’s unpaid internship. (I work in social work, for a non-profit agency)  If in fact I will have to factor in my wife’s income now that we are “federally” married, does IBR have options to lower this amount? I’m having visions of having to move back in with the parents, since that 600$ is essentially a rent payment….yikes.

Any advice/insight you can give is most appreciated!  I understand fully that you are not my lawyer-just looking for some educated insight.

Thank you very much!
-Heather (good name we have!)

Heather!  Love the name. 

Thank goodness the federal government will be recognizing your marriage!  Um, and unfortunately you may well now be in a position of waiving your new found right to file a joint federal tax return with your wife.  Student loan borrowers CAN separate their income from their spouses income, but only by filing a separate federal tax return.  Married folks tend to be better off from a tax perspective by filing jointly, but not always.  Even so, some of us will choose to pay more in taxes in order to pay less on student loans.  Think that through carefully when preparing your 2013 tax return.  Just because you can now file jointly, doesn’t mean you have to or should.

As for demonstrating your income now, you must answer the question about whether your current income is “significantly” different honestly, but it’s subjective and it’s appropriate for you to use your own judgement.  In any event, you need not factor in your wife’s income in light of the ability to separate your incomes.

What sucks is that because of your loans, you two may end up forgoing the federal tax benefits of marriage that you only just got.  That’s not cool but that’s the rule.