Hi Heather,

I have A LOT of law school debt and have been working in the public interest sector for about 4 years.  My plan has always been to take advantage of PISLF so that I can do work that I believe in.

However, we just had a baby and I am considering staying home with him for a year or two, as my income would be completely negated by the cost of daycare, and I want to be there for my new son.

My husband does not have any student debt.

We have been filing our taxes separately so as not to astronomically increase my IBR loan payments.

I have put my loans in forbearance for several months while I am on maternity leave.  But what happens if I decide to stay home and not make any (or much) money for a year or two years or more? Will I have to make payments because my husband has an income?

I haven’t been able to find any information that answers these questions, although I am sure they must come up a lot for new parents.

Thank you so much in advance for your help!

Hey @meowser80. There are two different concepts at play here: PSLF and your income-driven repayment plan (you said you were using IBR).

Under IBR, you can continue filing your taxes as MFS. If you’re not working, your income would be zero and you would not be required to make any student loan payments. Meanwhile, your loan balances will be growing each year thanks to the accumulating interest. These $0 payments will count towards your 25 years of IBR forgiveness, meaning that if you never work again in your life ultimately your debt would be forgiven under IBR (although the government will treat the forgiven amount as taxable income).

During this time of no employment, you will not be making any qualified payments, therefore you will not be making any progress towards PSLF. To apply for loan forgiveness under PSLF you need 120 qualified payments, so this would be “on hold” while you stayed at home. If you’re still planning on going the PSLF route, I’d consider making sure the 4 years of work you’ve completed are certified by filing a PSLF Employment Certification form.

One thing to consider is whether you’re paying extra taxes thanks to filing as MFS rather than MFJ. Unfortunately, the tax brackets are worse for MFS and if your significant other is a high income earner, you are likely paying a tax penalty by filing as MFS. It’s up to you to determine whether the tax penalty outweighs the benefits of the student loan debt.

Oh, and congratulations on the baby!

-Biglaw Investor
http://www.biglawinvestor.com/