Hi Shane! There are a few things to hit here.

First, are you referring to the SAVE calculator on this site? Without knowing what tool you are using it is hard for me to explain any discrepancies you are seeing.

Second, the SAVE plan doesn’t consider spousal income if you file your taxes separately. If you file jointly, it will consider both of your incomes. However, it will also consider both of your federal student loans.

Lastly, I’ll note that for a couple such as yourselves who both have incomes and both have student loans, filing separately will still result in slightly lower payments than what it would if you file jointly. This concept goes back to the discretionary income calcluation. This discrepancy is magnified if you two have kids.

Payments on IBR/REPAYE depend upon your income, not your balance or number of loans. If the formula says you can pay $122 per month, that will be your bill no matter how many loans you have or how big they are.

The easy way to estimate payments is to use the Department of Education loan simulator. If your monthly payments are much larger than what the simulator says they should be, there is a problem.

If you really want to get into the details, you can take a look at how discretionary income is calculated and do the math for yourself.

It gets more complicated as you factor in child care credit, student loan interest, and other things you lose out on my filing separately. For us at least, the lack of the child care credit is offset by the fact that we both have access to a dependent care FSA so we can put $2500 each in the FSA pre-tax. It basically means tax time for me is running taxes several different ways, and also running student loan calculators several different ways.

That is a really interesting point Dave. As your family size grows the potential for lower payments by filing separately would grow as well. I will do some calculations and update accordingly. Thanks for sharing.

But here’s the kicker, we are still a household of 4 when filing separately. So we would individually have a discretionary income of 14,000 when filing separately.

That’s assuming both spouses are on payment plans based on the same % of discretionary income.

You read that correctly. If it is processed correctly it should be a total of 10% of your joint discretionary income if you are both on the same plan.