Hello,

I received an email from my lender that my first payment was due under an extended repayment plan.  I logged into my account and attempted to apply for IBR.  My wife and I file jointly.  I owe $135,000, and my wife owes $70,000 in federal students loans (direct stafford subsidized and un-subsidized).  Our combined AGI last year was $120,000. 

I put this info into the online application on my loan servicer’s site, and I received the message, “ineligible”.  I am not sure why this happened.  My understanding is that when filing jointly, both my and my spouse’s income AND total student loan debt are considered.  Under a typical 10 year standard repayment plan, I would need to pay $1500 per month, while my spouse would need to pay $700 per month.  Combined, we would be paying in excess of $2000+ per month.

Under IBR, I estimate based on our AGI of $120,000 and a family size of three, our payment would be $1134 per month.  Is there something I am missing that would make us ineligible?  Our loans are both eligible federal student loans, and based on the numbers I just provided, it’s my understanding that we have a partial financial hardship.  Any advice anyone can provide would be greatly appreciated.

I don’t know how IBR is evaluated for married couples, so can’t speak to that underlying issue. But here are some suggestions for making sure that your situation is being correctly determined by the loan servicer/Feds:

You may want to call the loan servicer and confirm that they are evaluating all of your potentially eligible loans. I know that for some people who have loans still in a grace period (even if it is ending in a few days), the loan servicer will tell them that they are ineligible for IBR because the loan servicer only evaluates the loans in its database for that person AND that are in repayment status.

Basically, the loan servicer’s analysis of whether you qualify for IBR is not always accurate. You could plug in your info to the Fed’s student loan IBR calculator and see what it says. And you also aren’t barred from applying for IBR regardless of what the loan servicer’s website says (whether you apply electronically or through mail/fax).