I am recently married this past summer and my husband makes about $60k and has $20k in student loans that he is repaying on a non-IBR plan. I will have $200k in debt when I graduate veterinary school with the potential of making $30k the first 4 years and then increasing to about $70-80k. Due to the debt to income discrepancy (especially those first 4 years), I was planning on using IBR for my portion of the loans based on your suggestion from a talk at my school.

The question:

If we were to file jointly now (my last year of vet school) and then choose to file independently next year, would our incomes still be considered separate the following year when its time to calculate the IBR for my loans? Or once he has “contributed to my education” (ie by filing jointly this year) is it too late to consider our incomes separate?

(If our incomes are combined, I do not think we would qualify for IBR on my loans anymore which is why this is so important to me.)

Thanks!

Congrats on your marriage!  You get to decide every year whether to file jointly or separately.  Note that IBR payments are usually based on the previous year’s tax return, so most folks who want to file separately should do so in the year they graduate (the tax return that covers the previous calendar year).

Hi Heather, I just discovered your website it is very informative and I appreciate your help. I just wanted further clarification on your above answer.  My wife is graduating in 2015 and for our 2014 taxes (due in 5 days)  I plan to file married filing jointly as after running the numbers we would receive more in a refund then we would pay in increased loan payments for 2015. However, this is the case because she had no income in 2014. Now in 2015 I would want to file separately so that both of our incomes are not counted towards the payment calculation. Would the loan provider calculate the payments based on the latest tax return (2015) which at this point would be married filing separately or would they require we count both our incomes since that is how we started the repayment program.

Simply put does filing married filing jointly the first year lock you in to having both incomes counted for the next 20 years (PAYE) or is it really based on your filing status each year (whatever that may be)?

Thank you for your help.