Are you married, but only one of you owes federal student loans? Are you struggling to make the monthly payment, or worse, are you behind? Do you file your tax returns jointly?
If the answer to all of these questions is yes, then I have some good news for you. You might be able to lower your monthly payment!
The average amount of student loan debt being carried in this country is close to $30,000! Professionals, like teachers, lawyers, doctors, and chiropractors, can have much more than this, often upwards of $100,000! In this bad economy, making the payments on this much debt can be a struggle. Enter the income based repayment plan.
What Is an Income Based Repayment Plan?
The Department of Education has established three payment plans that are based on your debt-to-income ratio:
The "debt" is your total student loan debt, and the "income" is your adjusted gross income (AGI) from your last year's tax return as compared to your family size.
What's the Problem with Joint Tax Returns?
The problem with this can come in where a married couple files a joint tax return where only one spouse owes federal student loans. In that instance the income is the joint AGI, not the income of just the borrower. This can make a big difference in the payment you would be required to make if you qualified for one of these programs.
In this situation, you should talk to a student loan lawyer and a tax professional to see if filing separate tax returns might make sense. For example, let's say that filing separate tax returns would result in paying $1,500 more in federal taxes.
However, when using just your AGI to calculate a payment in an income based plan, you save $250 per month, that's $3,000 per year and a net savings of $1,500! Depending on your income and loan balance, the savings could be a lot more!
So What Do I Do?
If you are looking for a solution to your student loan problem and wondering if there is one, then there is a great way to find out for free! Just click here to provide me with all the details on your loans. I will then, for free and with no obligation on your part, look at your situation to see if I can provide you with a way to deal with them. If there isn't one, it didn't cost you anything. If there is, then I will contact you to schedule an analysis session with my office to lay out a plan of action.
If you would like more information about student loans, you can dowload my free book, I Graduated; Now What? A Guide to Dealing with Your Student Loans.
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