Hi Kathryn,

Its really tricky to answer this question because co-signing isn’t really somethign that happens with federal student loans. You have direct loans taken out by the borrower, or Parent PLUS loans where one parent borrowers for the student. I suppose it is possible you have a spousal joint-consolidation loan, but that would have required debt in both your names.

That all said, if you have a Parent PLUS loan in your name, you should be able to consolidate it to gain elibility for the ICR plan. You might also be able to use a double-consolidation if you have mulitple loans to gain eligiblity for SAVE.

If you are going to consolidate, you may also want to do it before the April 30th deadline to take advantage of the one-time payment account adjustment.

Hi Ray,

I’m glad I was helpful last time around. Hopefully I can be helpful this time too.

Unfortuantely, I don’t think you will like my answer on this one.

If the income your wife receives is included on your AGI (and I’m taking your word for this one as I’m not a tax expert), then her income will be used in the payment calculations if you file jointly.

I’m also not sure of what you could ask of the people at the Department of Education or Federal Student Aid as the rules on this issue are pretty clear.

However, there is one potential work around. You could file your taxes seperately. This may potentially increase your tax bill, but it might not. I’d encourage you to discuss this option with your tax preparer. Alternatively, if you file your taxes yourself, take the time to cacluate your tax bill both ways. If filing seperately saves you a great deal of money on student loans, but the tax bill is only slighlty higher or it is the same, you have your answer. Many couples end up using this option.

You provided a very helpful answer to an inquiry I sent to you last fall, so thank you for that. I did have one follow-up I hope you can answer.

You have indicated that people who live exclusively on Social Security likely would have a $0 payment on their student loans. (I have a direct consolidation loan in ICR status.) Would DOE also regard income my wife receives from the Teachers Retirement System of Georgia in the same way? I know that if we file jointly, both sources are considered part of the AGI. Taken together, those sources account for 80% of our total income – the rest coming from my freelance writing and interest from her investment account.

Would it also make sense to ask anybody at DOE about this, either at Federal Student Aid or some other sub-agency?

Hi Ray,

That is a tricky question.

For starters, that $907 monthly payment seems a bit high for a monthly ICR payment based on the numbers you have provided, especially if you filed seperately on your last tax return.

The important thing to remember is that the AGI is the critical number for IDR calculations. Many borrowers who live primarily on social security qualify for $0 per month payments.

Sadly, the timing of when you applied for the loan and when you consolidated it has no impact on your IDR calculations. As much as I hate to pile on, the odds of negotiating a smaller payment are likewise pretty small. You are kind of at the mercy of the IDR calculation.

If the joint filing is a one-time thing, you might be able to essentially bury that year from IDR calculations. However, if it will be ongoing, her income will impact your AGI as a couple, and that will increase your monthly bill.

I have a Direct Consolidation loan – consolidated from two federal Parent PLUS loans and an unsubsidized federal loan – which has been in forbearance since 2019, has an ICR plan, and has an outstanding balance of almost $84,000. The servicer, since April 4 of this year, has been Nelnet.

Next April, I can apply for renewed deferment; otherwise, on June 22, automatic $907 monthly withdrawals resume – which I can’t afford to pay.

Every month, my wife and I receive Social Security ($2,202 mine, $110 hers) and she gets $3,048 from our state’s Teacher Retirement System. As a semi-retired freelance writer, I make an uncertain and sporadic income, which will gross about $10,000 in 2023.

For tax purposes, it may be very advantageous for us to file jointly in 2023 for the first time, but I’m concerned my wife’s unearned income may be counted by the DOE against my loan repayment obligation.( I didn’t know her when I obtained the original loan, nor were we married when I consolidated it.)

So, do you think I have a chance of receiving a continued forbearance next year or, failing that, can I obtain a lower-cost loan or even negotiate a good-faith repayment of a small portion of my monthly bill – say a quarter to a third of it?

Thank you for your help and your excellent work for so many.

I think I see the confusion. You will be able to sign up for SAVE for all of your graduate loans. Parent PLUS loans are the ones that don’t qualify for SAVE.

I don’t currently have any parent plus loans. additional to the other loans that i will be accepting for graduate school that will be eligible for the SAVE payment plan i will also be taking out ineligible graduate plus loans. Will my graduate plus loans once converted into a consolidated loan continue to be eligible for the icr repayment plan as they state parent plus loans will be after the jul 1, 2024 sunseting of the program for other barrowers ?

This is a tricky question. Do you have Parent PLUS loans?

Also, is there a particular reason that you want to have the ICR plan? If you don’t have any Parent PLUS loans, the new SAVE plan is almost certainly a better option.