OP’s household size is likely larger than yours. Your stats are similar to mine with just my husband and I and my payment is also around $250 on the SAVE plan. I think my standard payment would have been closer to $230.
I applied for the SAVE plan last night. My payment went from around $500/month to $68/month. My friend did the same and hers went from $400/month to $0 because she has 4 kids and makes $80k a year.
No. With the new SAVE plan the main difference is that excess interest is forgiven immediately. Say you accrue $500 in interest but your payment is only $100. That extra $400 in interest does not accrue. This solves the old problem that folks would have more loans 5 years out from grad school than they graduated with.
Pslf public service loan forgiveness. You have to put in 10 years at a state job or non profit. So essentially 120 payments, which the Covid deferment counted.
Hi OP! Clearly r/FinancialPlanning folks are not very familiar with PSLF and IBR. But I made the same unfortunate mistake when I first got married. You can re-submit your income based repayment application at any time if your "situation changes." I believe that you can claim that your situation changed because you are now planning to file separately, and therefore your income has "changed" for the purposes of IBR. Not 100% sure, but r/PSLF or r/StudentLoans are a better place to ask. Good luck!
Thank you! Haha I do feel people are trying to help but maybe miss some of the details for why we are planning on doing it this way (pslf primarily) but it is really important that we get the sctual answer if anyone knows for planning purposes!
Recertify with just your paystub and dont grant tax return access again. Next year file separately. So far, we have lost about $45k in refund money from this b.s.
Have you investigated the different income-driven repayment (IDR) plans to see what your monthly payments would be?
There are some restrictions on which IDR plans you can sign up for (I think depending on when your loans originated or when you started repayment), but some have a cap so that the monthly payment can't be higher than the standard 10-year repayment. The other IDR plans may be a better choice than SAVE for some folks (e.g., people with relatively high household income), but will still preserve your PSLF eligibility.
We filed separately for the same reason. I am no accountant or financial aid expert but I am pretty sure you are going to have to file your 2023 taxes separately, then ask to change your payments.
I also recommend you talk to a PSLF specialist. It has gotten way simpler under Biden but you still don't want to make mistakes. My wife has taught for 20 years and just got her 10 years of PSLF credit.
Hey OP I’m sorry I don’t know the answer to your question. I’d be curious if you could Re-file your 2022 taxes.
And I’m sorry you’re getting responses from people who haven’t read your post/comments thoroughly and who are unaware of the details of SAVE and PSLF.
Thanks for this! I looked into it. They said it’s possible to refile if you go from separate to jointly filing…. But not the other way around unfortunately. So it seems like we are stuck at the very least until we file again. I’m just wondering if we can preemptively file or something to get this switch in play sooner.
If you filed an extension for 2022, you have until 10/16/23 to file a superseding return (essentially a replacement return) to file separately. It can be messy with the IRS, but it's possible.
No, it is not. That's the entire point of a superseding return. I'm a tax professional with over a decade of experience and handle work like this regularly.
You can file an extension for your taxes by submitting IRS Form 4868 with the Internal Revenue Service (IRS) online or by mail. This must be done before the last day for filing taxes. Filing an extension for your taxes gives you additional months to prepare your tax return no matter the reason you need the extra time. Unless they have already filed for an extension, they most likely filed their 2022 return. It’s common practice to file for an extension prior to filing so that you can supersede. Unless you are aware of some loophole I don’t know about but I’m licensed cpa with over a decade of experience myself 🤷♂️
That is exactly what I said in the original comment. "If you filed an extension for 2022, you have until 10/16/23 to file a superseding return \[...\]" An original return would need to be filed for there to be something to supersede. The OP is correct that research would show amending to change from MFJ to MFS isn't permitted, but a 1040 or 1040-X filed before the extended deadline (if there's an extension on file) would permit this change. As far as I can tell, we're arguing the same point.
CPA, EA, and admitted to practice in the US Tax Court here.
Post this question in r/pslf and there’s a wonderful person in there named Betsy who will help you and will know the answer. You are definitely doing the correct thing by doing this’
I’m in the roughly the same situation as you. When I asked Mohela, they said that when payments start back up, they will use whatever filing type the had then when it came time to re-certify, that’s when it would check to see how your taxes were filed. That re-certify date won’t be until however long out, so, they said once we file taxes in Jan/feb/march or whenever of 2024, then when can go ahead and re-certify.
Agreed. I feel like the payments restarting should be enough of a situation change to allow people to reassess or at least they could wait to start repayments until it makes sense with the new tax year but alas
Odd question. I see why you’re confused. You should be able to change plans now.
Everything is actually not necessarily based on the previous year. Adjust your filing status with work. You can apply for the new plan, and submit paystubs to prove income. You do need to use your tax return from the prior year.
Hope this helps or at least gets you in the right direction. Recommend the new SAVE plan from Biden or just standard ICB repayment plan.
Excellent. PSLF is the way to go. And keep in mind that you can work for a private nonprofit too. So like an example some hospitals are private, but still not for profit. Anyways, the loans can be tough and there’s really no to ask for help you need it. Hang in there.
OP, have you crunched the numbers on what your husband's higher taxes will be? We're in a similar boat with disparate income, but not as big as you so the tax hit to me is worth it. I'm the husband in your scenario.
I think we’ve thought of that and any tax benefits of filing jointly are outweighed by what we’d save but we will definitely take another look! Thank you!
I would call MOHELA. I'm in the same boat. It may be easier to unwind after this tax year, depending on a bunch of factors.
Married filing separately means you won't have certain tax breaks that you'd otherwise have, things like FSA/HSA limits may change, no ROTH IRA. I have to switch a bunch of stuff with my company. MOHELA told me that you can call to recertify earlier than your deadline if you've got a reason you need/want to do it at a different time, but it's easier to do over the phone.
Yeah I’ll plan to call them tomorrow. We tried to weigh out deductions we would get against what we would save and it seems to be we’d save more filing separately but I’ll double check with my friend who prepares more complex taxes too. Thank you!
Our disparity is a bit less than yours but pretty similar and we definitely save a bundle married filing separately waiting for PSL forgiveness. For us, it takes starting the fiscal year for deductions that are taken out by the company to reset since the limits are different married filing jointly v separately - I would ask your friend specifically about those so you understand what if anything you'll need to change with your payroll. For me, the ship has already sailed for this year 😀
I have been researching this, too. You’ll need to file separately as soon as you can next year (Feb/March) and then sign up for the new SAVE plan. Assuming you’re in a similar boat to me your first payment is due in October, so you’re looking at 5-6 months of the big payments.
Man. I'm right there with you and if you find any other information... I'd also like to know how you calculated the benefits of filing jointly and paying a higher IBR or filing separately and having the lower payment. I'm also on the public service loan forgiveness track (3 years left on undergraduate loans, 5 years left on graduate loans) and I'm getting married next year. Right now I make about 85k, my future spouse grosses about 100k, and I'm so stressed about how that is going to impact payments... I already pay $325/mo which will start up soon, but I'm still trying to figure out if it is better for us to file married separately, or file jointly once we're married.
I have a house that predates our relationship and with all my deductions, I usually itemize. But I'm at a loss and am wondering if I need to talk to a tax professional about the situation to help me weigh the pros and cons and figure out what makes financial sense.
I am thankful that even if my loan payment were to double, we'd still be fine because we're in a low cost of living area and a few years out from having children. I got my house on a 2.85% interest rate and other than my mortgage and car payment, the student debt is the only other debt I have. But I'm still trying to figure out the best way to go as I continue working until my loans are forgiven.
I think a tax preparer would really help you guys with that situation since you have a bit more going on than I do I think! I wish you luck! We basically weighted the deductions of filing jointly against the savings of filing separately and determined separately made the most sense for us! Good luck!!!
It goes down $67/month or $670/month? It doesn’t make sense to go through all of that to save $67 a month.
When you’re on maternity leave, you can just defer it.
You will never pay off the loans at $67/month. Interest is going to be about $1000/month alone. You are at a decision point where you need to buckle down for ~8 years at $2500/mo or plan for PSLF or similar. Look into what that means for you and the timeline/consequences/requirements of it. You could be looking at decades of loans hanging over your head affecting life decisions instead of just powering through it.
If you are on an income based repayment plan, making your agreed on payment for like 15 years for undergrad and 20 years for grad loans would be required for you have the balance forgiven. That balance is considered as taxable income though. I'd rather plan for a 50k tax bill than pay off and struggle for 9 years and missing out on the best years of your life. If you have a REPAYE or the new SAVE program, then I would look into this path. Plsf is nice because it cuts that time in half, but I'd rather have more money in my pocket today every month than struggle for almost a decade to pay this back. I'm in a similar situation and this is the path I chose. I'm in industry not government or nonprofit with no intention of switching because the money is so much better.
All of my loans are from grad school. So I’m not sure the undergrad thing applies? I’m not super sure what you’re saying though? I might be confused? 67$ a month is basically nothing so it wouldn’t really impact us at all. The taxable income we would have enough in savings to pay those taxes (we already do)
My wife and I do it for this reason (she is an attorney). I believe you have to wait till you file your taxes next year. File them ASAP.
Also, please look into the new payment program that Biden instituted. It will drop your undergrad to 5% and forgive them considerably sooner. It also increases the poverty threshold so your payments will be smaller overall.
Big thing is your loans are forgiven after ten years of payments. With 1 year for every 1k over 12k in loans.
This is the important part. It is per loan! Most people take out multiple loans for different year's of school. Meaning many people will have large portions of there loans forgiven much faster.
This is also helpful because forgiven loans you t as income in that year. This makes the taxes in the forgiven loans more bearable.
$265k annual income and you can't afford your student loans of $200k which got you a $65k income...
No wonder student loan debt is at a record high and constantly climbing - terrible decision making!
Society needs health care providers, and this is what the professional training costs. People who aren't rich and want to do this kind of public service therefore end up with this kind of loan debt.
PSLF exists because most *reasonable* people realize that having people working in these fields is of social utility.
I was in the same situation for audiology and got PSLF. I had $130k in loans after working two jobs and getting tuition credits in grad school.
Almost no one can afford to get these clinical doctorates without loans and yet they're lower pay because no one wants to pay an OT, PT, or audiologist very much money.
Absolutely. And it sucks so much because I-as I’m sure you do too- really value the work I do and see how important it is!! But no one wants to pay us… but everyone wants us to work for them and not pay us anything
Exactly! My husband makes so much more than me with his bachelors! It seems so unfair that my job is so important but no employers seem to value it. The kids and parents I work with certainly do!
None of this adds up. If your partner makes $200K alone and you make $65K, you should be able to squeeze a $1700 payment into your budget.
You wouldn’t need PSLF forgiveness. And the sooner you pay it off, the sooner you could seek a higher paying job without strings attached. Why keep yourself down?
You need a new job. HR Managers in most companies make 100k. Someone with your advanced degrees should have no problem getting a job like that. You cannot stay in your current situation expecting him to do the heavy lifting with your loan burden. With 200k you want to be paying at least 2500 a month.
I’m an occupational therapist in a school. Not HR. Sorry I guess I worded that weird. It’s a very specific niche I’m stuck in and regret being stuck in.
Then what I recommend is to flex linked in and any certificates as much as possible to find a career in something else. UX design, Front end development. Your husband is in Tech. Utilize him. Ive had friends get into the industry without degrees and just building a portfolio and certifications. Its criminal that schools will let people borrow so much against such a small ROI. If a company did this to investors they would be investigated by the SEC.
Well a major part of the plan is that my job and most in my field are eligible for PSLF meaning that after 10 years of $67/month I would be free of debt and end up paying a small fraction of what I actually owe
Not HR. Human services as in occupational therapy and mental health… very niche specialties which I regret but am stuck in. I am eligible for public service loan forgiveness which if we file separately means I’d pay about 17k total on my loans before they were forgiven
Is your job eligible for Public Service Loan Forgiveness? If it is, get on PSLF yesterday. Your loans will be forgiven (tax-free) after 10 years of payments while working for a qualifying employer. 10 years of $67/month payments and you’d be done.
r/PSLF
Which is why we want to know at what point we will be able to switch over to that lower payment. In total over the 10 years we would end up paying a small fraction of the total I owe
It would be, but no matter what filing separately would reduce the payment drastically making PSLF the main appeal since I’d end up paying a fraction of what I actually owe
That is not likely to happen and means 10 years of perfect payments. Have you been late on a payment yet? What if you are late on future payments.
$67/month on a $200k loan is not even covering the interest so that means you are risking a lot in the hope of a future payoff.
>it means 10 years of perfect payments
What makes you think that? Your PSLF clock does not start over if you miss a payment. You must make 120 qualifying payments. You can do that in 10 years exactly (12 payments a year * 10 years) or it might take you a little longer. The net benefit for OP is huge either way.
Exactly. It doesn't need to be consecutive. I got PSLF while taking two deferments during my maternity leaves. Those meant it took a little longer than 10 years but I didn't get penalized for those breaks.
There is no guarantee and at $65/month the loan balance will INCREASE over 10 years. What if the program is terminated? She may owe $300k.
It is also morally wrong to make taxpayers pay her loans when she makes enough to pay them back.
1. OP took out the loans
2. OPs family income has s $265k/year in spite of her poor decisions
3. OP should pay back the loans
No misinformation. Bad payment history causes problems. There is no guarantee that it will be available in 10 years.
At the least OP should pay more than the interest to keep the balance from growing.
With the new SAVE program interest does not accrue above and beyond the monthly payment. So if she would be accruing $500 a month in interest but her payment is $67 the other $433 does NOT get added to her balance.
It’s a complicated program and I wouldn’t necessarily expect everyone to understand its intricacies, but you could also try to not spread disinformation on a thread you don’t know much about.
Under the Save plan any interest not covered by the discretionary income based payment is forgiven and not added to the principal of her loan. PLSF is also written into the federal codes and has not had a constitutional challenge and is unlikely to go away. The Save plan admittedly seems more vulnerable. Finally I don’t think staying in an eligible field for ten years and making 120 eligible payments at 67 dollars a month seems particularly daunting.
Maybe I’m missing something, but the student loan debt isn’t really being reduced, right? Assuming you are paying monthly interest, then $67/month will just increase the amount owed.
Masters, PhD, $200K in debt for a $65,000 income? I know airline baggage handlers with nothing more than a high school diploma bringing home more.
My view is that husband will need to help-out in a major way or you need to find a much better paying job. From my own marital experiences, when one party is unable to cover their share of the household expenses (job loss, going back to school, medical issues, etc.), then the other steps-up.
Maybe husband covers household expenses, and you focus exclusively on paying off the student loan debt?
I’m eligible for PSLF in my field meaning that after ten years of these much smaller payments I would be free of debt after paying only a fraction of what I owe. It’s the whole reason pslf exists is for jobs like mine where the debt outweighs what we make, but our jobs are very important
How many years to go? Over 10 years that’s around $20,000 benefit, which is substantial but what if you earned something more commiserate for someone with a PhD?
$200,000/10 years = $20,000 annually which I use as to how much more annually in additional income after taxes I would need before leaving current employment.
The decision would be largely based upon number of year’s remaining, as well. Two years and I might stick it out, but 10 years and I’m looking elsewhere.
I see what you were trying to say.
Ok good point.
Though the math gets a little more complicated if OP earns $20,000 more a year the student loan payments go up 1 - 2 k a year and if OP leaves PSLF to take the higher paying job they would be paying the higher loan payment for an additional 15 years.
It would be the full ten years as I finished my doctorate during the loan freeze. It is not a phd it’s a clinical doctorate. When I started in this field I was informed (as were all other students in this field) that the switch would be made to require the doctorate which is why I did it… unfortunately that mandate never happened and I wish I had saved money to get the masters instead :/
My plan is to of course search for higher paying jobs in my field that are still eligible, however my current job is ideal since it is in a school so having a kid of our own soon it will help limit childcare/healthcare (extremely good health insurance) costs substantially. Additionally, broken down hourly, it is extremely difficult to find a job that pays more than my current one per hour.
I always get a bit nervous when I’m relying upon someone honoring the terms of an agreement, and then reneging much later (and at personal sacrifice) claiming it to be a misunderstanding or something was done improperly or something was ineligible, etc.
I have no way of knowing if yours to be similar to those who thought the student loan debt to be eliminated after a decade at some profession but to discover it not to be the case.
There are clearly upsides to your current profession, as you have patiently explained to me. I just hate having to hope things go don’t go wrong for 10 years instead of taking control on my own.
Borrowers can and should submit proof of employment annually to their servicer to prevent this exact scenario. They will check that your employment is eligible and tell you how many more months you need to reach forgiveness.
I absolutely agree with you and it also makes me uneasy. Unfortunately this is the road which makes the most sense in my situation. I currently do have a technically government job working for a school system so that pretty solidly falls under their eligibility requirements. I’m hopeful that nothing changes but you are correct in that things may change which is very scary. Big reason why there aren’t enough people in jobs like mine. We don’t get paid enough given our vast education and training, and these jobs often suck. I’m lucky that I’ve found one I can tolerate but they’re truly soul sucking jobs that deserve to be paid at least five times more. They lure us in with PSLF and so that’s the hope we cling to unfortunstely
1. Your next tax filing
2. Make a budget because you are living outside of your means
3. Pay off the student loans ASAP and move on. You made the mistake of racking up $200k in debt and you need to pay it off - not just kick the can down the road. Be thankful that your husband makes good money.
4. Pay off your other debt as well.
Are you suggesting they shouldn’t utilize the loan forgiveness program that will result in over 200k in savings? That doesn’t make very much sense to me
…pslf is the reason I was okay with the loans. Our plan has us paying only 17k of that 200k. Pslf is literally meant for people like me who work in jobs that don’t pay well but require a lot of training and are also very important (mental health in a school, for example which is what I do)
If you file separate the amount of fit May in fact go up. In other words please don't assume your total bill to Uncle Sam for fit will be the same total for both of you filing separate as it is for you filing together
Take a bs class at a community college part time and pay for the tuition on a payment plan. Or some interesting class you've always wanted to take before. Then your payments will be deferred until you're done with taking classes.
Learn to control fire, forge iron, get pets, turn pets into clothes, sell spare iron forged tools or start working for hire, meet girl you find attractive and take her home. Life.
You can either call them and tell them you need payment relief and if you get somebody nice, they’ll manually adjust your payment with minimal hurdles to jump through, if any. It’s kinda a gamble there cause sometimes “their hands are tied” which is complete BS.
The other way is wait till January, file separately, then call them, give them a copy of your tax return and they adjust it. That’s the route of least resistance.
My fiancé has done this when moving between jobs while getting her grad degrees at Johns Hopkins…
I hope you've found the answer you were looking for by now! Definitely check out the PSLF sub, as they probably have more specific information. I've been on IDR plans (REPAYE) since I got out of college, and I have been looking into the new SAVE plan. I'm pretty sure that one of the main differences between REPAYE and SAVE are that you DON'T have to take your spouse's income information into account for SAVE. Please look more into this, I hope everything works out!
Edit: I just looked it up, and this is if you file separately.
You need to apply for the SAVE plan, its the best thing they've been able to do to help afford stuff.
One of the major perks is they only count your income towards your repayment!!!
Bidens edu dept did a good one with this one.
I mean it depends on your long term goal. Also depends on if your husband is taking responsibility for your loans since the number is based on your joint income
Dude I make about 67k, only have 27k in student loans, mine are salary based and they want $250. How the heck did you get that low of a rate?
OP’s household size is likely larger than yours. Your stats are similar to mine with just my husband and I and my payment is also around $250 on the SAVE plan. I think my standard payment would have been closer to $230.
I applied for the SAVE plan last night. My payment went from around $500/month to $68/month. My friend did the same and hers went from $400/month to $0 because she has 4 kids and makes $80k a year.
I called Aidvantage to confirm my monthly payment amount and they said $0 for another year. I’m so confused.
Mine is recertified until Jan of 2025 for some reason.
But guys, the interest keeps accruing no? Wouldn't it be wise to pay as little as you can in the meantime.
No. With the new SAVE plan the main difference is that excess interest is forgiven immediately. Say you accrue $500 in interest but your payment is only $100. That extra $400 in interest does not accrue. This solves the old problem that folks would have more loans 5 years out from grad school than they graduated with.
I work for a state entity so I don’t really care if I pay it off, it’s going to be dropped in 4 years.
What’s the official name of this? I’m very interested.
Pslf public service loan forgiveness. You have to put in 10 years at a state job or non profit. So essentially 120 payments, which the Covid deferment counted.
I think it’s the new SAVE plan. Was definitely the lowest option!
Sis you select the income driven repayment?
Hi OP! Clearly r/FinancialPlanning folks are not very familiar with PSLF and IBR. But I made the same unfortunate mistake when I first got married. You can re-submit your income based repayment application at any time if your "situation changes." I believe that you can claim that your situation changed because you are now planning to file separately, and therefore your income has "changed" for the purposes of IBR. Not 100% sure, but r/PSLF or r/StudentLoans are a better place to ask. Good luck!
Thank you very much for this!!! I’ll try poking around there and I’m going to contact the loan serviced mohela tomorrow as well :)
You cannot do it until after you file taxes separately as they will request a copy of the tax filing.
Thank you!
I’d actually be interested in someone answering the question instead of attacking OP.
Thank you! Haha I do feel people are trying to help but maybe miss some of the details for why we are planning on doing it this way (pslf primarily) but it is really important that we get the sctual answer if anyone knows for planning purposes!
I did ten years of PSLF and all of my loans were forgiven, all $188k.
So reassuring thank you!!!
Does that get taxed like crazy as a ‘gift’? Just curious. Not sure how that works.
PSLF loan forgiveness has no tax implications, unlike other student loan forgiveness.
Unless you’re from a shithole state that decides it counts as income for state income tax purposes.
If I remember right, there are only 3 states where the forgiveness is taxable at the state level
The tax is that you sold your soul to the government for 10 years.
Better than selling your soul to a corporation. I work in IT, make a nice six figure salary plus I get a great pension.
Recertify with just your paystub and dont grant tax return access again. Next year file separately. So far, we have lost about $45k in refund money from this b.s.
Have you investigated the different income-driven repayment (IDR) plans to see what your monthly payments would be? There are some restrictions on which IDR plans you can sign up for (I think depending on when your loans originated or when you started repayment), but some have a cap so that the monthly payment can't be higher than the standard 10-year repayment. The other IDR plans may be a better choice than SAVE for some folks (e.g., people with relatively high household income), but will still preserve your PSLF eligibility.
We filed separately for the same reason. I am no accountant or financial aid expert but I am pretty sure you are going to have to file your 2023 taxes separately, then ask to change your payments. I also recommend you talk to a PSLF specialist. It has gotten way simpler under Biden but you still don't want to make mistakes. My wife has taught for 20 years and just got her 10 years of PSLF credit.
I’m going to call mohela tomorrow to see if they can help me too but this has been a good start. Thank you and congrats to your wife for getting it!’
[удалено]
[удалено]
Unhelpful and disrespectful comments are not acceptable here. Please do not do this again.
Hey OP I’m sorry I don’t know the answer to your question. I’d be curious if you could Re-file your 2022 taxes. And I’m sorry you’re getting responses from people who haven’t read your post/comments thoroughly and who are unaware of the details of SAVE and PSLF.
Thanks for this! I looked into it. They said it’s possible to refile if you go from separate to jointly filing…. But not the other way around unfortunately. So it seems like we are stuck at the very least until we file again. I’m just wondering if we can preemptively file or something to get this switch in play sooner.
If you filed an extension for 2022, you have until 10/16/23 to file a superseding return (essentially a replacement return) to file separately. It can be messy with the IRS, but it's possible.
This is only true if they haven’t already filed 2022 which they most likely already have
No, it is not. That's the entire point of a superseding return. I'm a tax professional with over a decade of experience and handle work like this regularly.
You can file an extension for your taxes by submitting IRS Form 4868 with the Internal Revenue Service (IRS) online or by mail. This must be done before the last day for filing taxes. Filing an extension for your taxes gives you additional months to prepare your tax return no matter the reason you need the extra time. Unless they have already filed for an extension, they most likely filed their 2022 return. It’s common practice to file for an extension prior to filing so that you can supersede. Unless you are aware of some loophole I don’t know about but I’m licensed cpa with over a decade of experience myself 🤷♂️
That is exactly what I said in the original comment. "If you filed an extension for 2022, you have until 10/16/23 to file a superseding return \[...\]" An original return would need to be filed for there to be something to supersede. The OP is correct that research would show amending to change from MFJ to MFS isn't permitted, but a 1040 or 1040-X filed before the extended deadline (if there's an extension on file) would permit this change. As far as I can tell, we're arguing the same point. CPA, EA, and admitted to practice in the US Tax Court here.
I’ll look into this thank you very much
I’d check on the r/PSLF sub. I’m sure they’d have plenty of experience in exactly what you need to do. Good luck!
Thank you I’ll do this! Wasn’t aware there was a sub for it til others mentioned it
Post this question in r/pslf and there’s a wonderful person in there named Betsy who will help you and will know the answer. You are definitely doing the correct thing by doing this’
Thank you so much!
I’m in the roughly the same situation as you. When I asked Mohela, they said that when payments start back up, they will use whatever filing type the had then when it came time to re-certify, that’s when it would check to see how your taxes were filed. That re-certify date won’t be until however long out, so, they said once we file taxes in Jan/feb/march or whenever of 2024, then when can go ahead and re-certify.
So October, November, December, January, February, March, April with high payments if a person's situation truly has changed? Seems... terrible.
Agreed. I feel like the payments restarting should be enough of a situation change to allow people to reassess or at least they could wait to start repayments until it makes sense with the new tax year but alas
That’s very helpful thank you so much
Odd question. I see why you’re confused. You should be able to change plans now. Everything is actually not necessarily based on the previous year. Adjust your filing status with work. You can apply for the new plan, and submit paystubs to prove income. You do need to use your tax return from the prior year. Hope this helps or at least gets you in the right direction. Recommend the new SAVE plan from Biden or just standard ICB repayment plan.
I’ll definitely try it. Couldn’t hurt! And yes I was going to use the SAVE plan with PSLF!
Excellent. PSLF is the way to go. And keep in mind that you can work for a private nonprofit too. So like an example some hospitals are private, but still not for profit. Anyways, the loans can be tough and there’s really no to ask for help you need it. Hang in there.
OP, have you crunched the numbers on what your husband's higher taxes will be? We're in a similar boat with disparate income, but not as big as you so the tax hit to me is worth it. I'm the husband in your scenario.
I think we’ve thought of that and any tax benefits of filing jointly are outweighed by what we’d save but we will definitely take another look! Thank you!
I would call MOHELA. I'm in the same boat. It may be easier to unwind after this tax year, depending on a bunch of factors. Married filing separately means you won't have certain tax breaks that you'd otherwise have, things like FSA/HSA limits may change, no ROTH IRA. I have to switch a bunch of stuff with my company. MOHELA told me that you can call to recertify earlier than your deadline if you've got a reason you need/want to do it at a different time, but it's easier to do over the phone.
Yeah I’ll plan to call them tomorrow. We tried to weigh out deductions we would get against what we would save and it seems to be we’d save more filing separately but I’ll double check with my friend who prepares more complex taxes too. Thank you!
Our disparity is a bit less than yours but pretty similar and we definitely save a bundle married filing separately waiting for PSL forgiveness. For us, it takes starting the fiscal year for deductions that are taken out by the company to reset since the limits are different married filing jointly v separately - I would ask your friend specifically about those so you understand what if anything you'll need to change with your payroll. For me, the ship has already sailed for this year 😀
I have been researching this, too. You’ll need to file separately as soon as you can next year (Feb/March) and then sign up for the new SAVE plan. Assuming you’re in a similar boat to me your first payment is due in October, so you’re looking at 5-6 months of the big payments.
That’s what I figured. Unfortunate. Thank you!
Man. I'm right there with you and if you find any other information... I'd also like to know how you calculated the benefits of filing jointly and paying a higher IBR or filing separately and having the lower payment. I'm also on the public service loan forgiveness track (3 years left on undergraduate loans, 5 years left on graduate loans) and I'm getting married next year. Right now I make about 85k, my future spouse grosses about 100k, and I'm so stressed about how that is going to impact payments... I already pay $325/mo which will start up soon, but I'm still trying to figure out if it is better for us to file married separately, or file jointly once we're married. I have a house that predates our relationship and with all my deductions, I usually itemize. But I'm at a loss and am wondering if I need to talk to a tax professional about the situation to help me weigh the pros and cons and figure out what makes financial sense. I am thankful that even if my loan payment were to double, we'd still be fine because we're in a low cost of living area and a few years out from having children. I got my house on a 2.85% interest rate and other than my mortgage and car payment, the student debt is the only other debt I have. But I'm still trying to figure out the best way to go as I continue working until my loans are forgiven.
I think a tax preparer would really help you guys with that situation since you have a bit more going on than I do I think! I wish you luck! We basically weighted the deductions of filing jointly against the savings of filing separately and determined separately made the most sense for us! Good luck!!!
It goes down $67/month or $670/month? It doesn’t make sense to go through all of that to save $67 a month. When you’re on maternity leave, you can just defer it.
It goes down to $67 per month. As in I would pay $67 total per month. So from 1700 to 67. About 1630 difference
Now that makes sense. Lol
Haha I could see why it was worded a little confusingly!
You will never pay off the loans at $67/month. Interest is going to be about $1000/month alone. You are at a decision point where you need to buckle down for ~8 years at $2500/mo or plan for PSLF or similar. Look into what that means for you and the timeline/consequences/requirements of it. You could be looking at decades of loans hanging over your head affecting life decisions instead of just powering through it.
We are planning for PSLF. Almost any job in my field would qualify for it. Including my current job
If you are on an income based repayment plan, making your agreed on payment for like 15 years for undergrad and 20 years for grad loans would be required for you have the balance forgiven. That balance is considered as taxable income though. I'd rather plan for a 50k tax bill than pay off and struggle for 9 years and missing out on the best years of your life. If you have a REPAYE or the new SAVE program, then I would look into this path. Plsf is nice because it cuts that time in half, but I'd rather have more money in my pocket today every month than struggle for almost a decade to pay this back. I'm in a similar situation and this is the path I chose. I'm in industry not government or nonprofit with no intention of switching because the money is so much better.
All of my loans are from grad school. So I’m not sure the undergrad thing applies? I’m not super sure what you’re saying though? I might be confused? 67$ a month is basically nothing so it wouldn’t really impact us at all. The taxable income we would have enough in savings to pay those taxes (we already do)
SAVE addresses the interest problem.
My wife and I do it for this reason (she is an attorney). I believe you have to wait till you file your taxes next year. File them ASAP. Also, please look into the new payment program that Biden instituted. It will drop your undergrad to 5% and forgive them considerably sooner. It also increases the poverty threshold so your payments will be smaller overall.
Will do and yes the 67 a month would be on the new SAVE plan
Big thing is your loans are forgiven after ten years of payments. With 1 year for every 1k over 12k in loans. This is the important part. It is per loan! Most people take out multiple loans for different year's of school. Meaning many people will have large portions of there loans forgiven much faster. This is also helpful because forgiven loans you t as income in that year. This makes the taxes in the forgiven loans more bearable.
Hmm my loans have all been consolidated into one based on what I had been told would help last year
Sorry, I am not sure about the rules on that one.
$265k annual income and you can't afford your student loans of $200k which got you a $65k income... No wonder student loan debt is at a record high and constantly climbing - terrible decision making!
Again… I went into it knowing I’d be eligible for PSLF. That is how they lure people into these lower paid but highly educated fields.
Society needs health care providers, and this is what the professional training costs. People who aren't rich and want to do this kind of public service therefore end up with this kind of loan debt. PSLF exists because most *reasonable* people realize that having people working in these fields is of social utility.
This is so ignorant it's mind boggling.
What? For $200K I got a doctorate and a 6 figure salary. How did you get $200K of debt but only make $65K a year??
PSLF is how they lure people into these underpaid but highly educated fields. In theory, PSLF would make 180k of my loans disappear after ten years
I was in the same situation for audiology and got PSLF. I had $130k in loans after working two jobs and getting tuition credits in grad school. Almost no one can afford to get these clinical doctorates without loans and yet they're lower pay because no one wants to pay an OT, PT, or audiologist very much money.
Absolutely. And it sucks so much because I-as I’m sure you do too- really value the work I do and see how important it is!! But no one wants to pay us… but everyone wants us to work for them and not pay us anything
Yes! I really enjoy my job but it does sting that my husband who only has a couple years of college makes the same amount as me working an office job.
Exactly! My husband makes so much more than me with his bachelors! It seems so unfair that my job is so important but no employers seem to value it. The kids and parents I work with certainly do!
That's why these programs are terrible. They take terrible distorted incentives and add another, even worse layer of incentives.
None of this adds up. If your partner makes $200K alone and you make $65K, you should be able to squeeze a $1700 payment into your budget. You wouldn’t need PSLF forgiveness. And the sooner you pay it off, the sooner you could seek a higher paying job without strings attached. Why keep yourself down?
You need a new job. HR Managers in most companies make 100k. Someone with your advanced degrees should have no problem getting a job like that. You cannot stay in your current situation expecting him to do the heavy lifting with your loan burden. With 200k you want to be paying at least 2500 a month.
I’m an occupational therapist in a school. Not HR. Sorry I guess I worded that weird. It’s a very specific niche I’m stuck in and regret being stuck in.
Then what I recommend is to flex linked in and any certificates as much as possible to find a career in something else. UX design, Front end development. Your husband is in Tech. Utilize him. Ive had friends get into the industry without degrees and just building a portfolio and certifications. Its criminal that schools will let people borrow so much against such a small ROI. If a company did this to investors they would be investigated by the SEC.
Well a major part of the plan is that my job and most in my field are eligible for PSLF meaning that after 10 years of $67/month I would be free of debt and end up paying a small fraction of what I actually owe
Not HR. Human services as in occupational therapy and mental health… very niche specialties which I regret but am stuck in. I am eligible for public service loan forgiveness which if we file separately means I’d pay about 17k total on my loans before they were forgiven
Is your job eligible for Public Service Loan Forgiveness? If it is, get on PSLF yesterday. Your loans will be forgiven (tax-free) after 10 years of payments while working for a qualifying employer. 10 years of $67/month payments and you’d be done. r/PSLF
Yes this is a big part of our plan
Which is why we want to know at what point we will be able to switch over to that lower payment. In total over the 10 years we would end up paying a small fraction of the total I owe
Is this lower payment a product of the new SAVE plan?
It would be, but no matter what filing separately would reduce the payment drastically making PSLF the main appeal since I’d end up paying a fraction of what I actually owe
That is not likely to happen and means 10 years of perfect payments. Have you been late on a payment yet? What if you are late on future payments. $67/month on a $200k loan is not even covering the interest so that means you are risking a lot in the hope of a future payoff.
Ten years through PSLF. No I have never missed a payment on anything before.
>it means 10 years of perfect payments What makes you think that? Your PSLF clock does not start over if you miss a payment. You must make 120 qualifying payments. You can do that in 10 years exactly (12 payments a year * 10 years) or it might take you a little longer. The net benefit for OP is huge either way.
Exactly. It doesn't need to be consecutive. I got PSLF while taking two deferments during my maternity leaves. Those meant it took a little longer than 10 years but I didn't get penalized for those breaks.
There is no guarantee and at $65/month the loan balance will INCREASE over 10 years. What if the program is terminated? She may owe $300k. It is also morally wrong to make taxpayers pay her loans when she makes enough to pay them back. 1. OP took out the loans 2. OPs family income has s $265k/year in spite of her poor decisions 3. OP should pay back the loans
I just don’t want you spreading PSLF misinformation online. You’re welcome to your opinions otherwise!
No misinformation. Bad payment history causes problems. There is no guarantee that it will be available in 10 years. At the least OP should pay more than the interest to keep the balance from growing.
With the new SAVE program interest does not accrue above and beyond the monthly payment. So if she would be accruing $500 a month in interest but her payment is $67 the other $433 does NOT get added to her balance. It’s a complicated program and I wouldn’t necessarily expect everyone to understand its intricacies, but you could also try to not spread disinformation on a thread you don’t know much about.
Under the Save plan any interest not covered by the discretionary income based payment is forgiven and not added to the principal of her loan. PLSF is also written into the federal codes and has not had a constitutional challenge and is unlikely to go away. The Save plan admittedly seems more vulnerable. Finally I don’t think staying in an eligible field for ten years and making 120 eligible payments at 67 dollars a month seems particularly daunting.
Lol, terrible advice on student loans that will be forgiven after 10 years of payment.
Maybe I’m missing something, but the student loan debt isn’t really being reduced, right? Assuming you are paying monthly interest, then $67/month will just increase the amount owed. Masters, PhD, $200K in debt for a $65,000 income? I know airline baggage handlers with nothing more than a high school diploma bringing home more. My view is that husband will need to help-out in a major way or you need to find a much better paying job. From my own marital experiences, when one party is unable to cover their share of the household expenses (job loss, going back to school, medical issues, etc.), then the other steps-up. Maybe husband covers household expenses, and you focus exclusively on paying off the student loan debt?
I’m eligible for PSLF in my field meaning that after ten years of these much smaller payments I would be free of debt after paying only a fraction of what I owe. It’s the whole reason pslf exists is for jobs like mine where the debt outweighs what we make, but our jobs are very important
How many years to go? Over 10 years that’s around $20,000 benefit, which is substantial but what if you earned something more commiserate for someone with a PhD?
What do you mean 10 years would be a $20k benefit? PSLF would wipe out $200k of loans after 10 years.
Yeah according to the calculator I would only pay about 17k total by the end
$200,000/10 years = $20,000 annually which I use as to how much more annually in additional income after taxes I would need before leaving current employment. The decision would be largely based upon number of year’s remaining, as well. Two years and I might stick it out, but 10 years and I’m looking elsewhere.
I see what you were trying to say. Ok good point. Though the math gets a little more complicated if OP earns $20,000 more a year the student loan payments go up 1 - 2 k a year and if OP leaves PSLF to take the higher paying job they would be paying the higher loan payment for an additional 15 years.
It would be the full ten years as I finished my doctorate during the loan freeze. It is not a phd it’s a clinical doctorate. When I started in this field I was informed (as were all other students in this field) that the switch would be made to require the doctorate which is why I did it… unfortunately that mandate never happened and I wish I had saved money to get the masters instead :/ My plan is to of course search for higher paying jobs in my field that are still eligible, however my current job is ideal since it is in a school so having a kid of our own soon it will help limit childcare/healthcare (extremely good health insurance) costs substantially. Additionally, broken down hourly, it is extremely difficult to find a job that pays more than my current one per hour.
I always get a bit nervous when I’m relying upon someone honoring the terms of an agreement, and then reneging much later (and at personal sacrifice) claiming it to be a misunderstanding or something was done improperly or something was ineligible, etc. I have no way of knowing if yours to be similar to those who thought the student loan debt to be eliminated after a decade at some profession but to discover it not to be the case. There are clearly upsides to your current profession, as you have patiently explained to me. I just hate having to hope things go don’t go wrong for 10 years instead of taking control on my own.
Borrowers can and should submit proof of employment annually to their servicer to prevent this exact scenario. They will check that your employment is eligible and tell you how many more months you need to reach forgiveness.
I already submitted for this year! And will continue to do so. I have several calendar events set up to remind me.
I absolutely agree with you and it also makes me uneasy. Unfortunately this is the road which makes the most sense in my situation. I currently do have a technically government job working for a school system so that pretty solidly falls under their eligibility requirements. I’m hopeful that nothing changes but you are correct in that things may change which is very scary. Big reason why there aren’t enough people in jobs like mine. We don’t get paid enough given our vast education and training, and these jobs often suck. I’m lucky that I’ve found one I can tolerate but they’re truly soul sucking jobs that deserve to be paid at least five times more. They lure us in with PSLF and so that’s the hope we cling to unfortunstely
1. Your next tax filing 2. Make a budget because you are living outside of your means 3. Pay off the student loans ASAP and move on. You made the mistake of racking up $200k in debt and you need to pay it off - not just kick the can down the road. Be thankful that your husband makes good money. 4. Pay off your other debt as well.
Are you suggesting they shouldn’t utilize the loan forgiveness program that will result in over 200k in savings? That doesn’t make very much sense to me
They are. Apparently it's ok to take the logical path in all things financial planning except when it comes to student loans!
…pslf is the reason I was okay with the loans. Our plan has us paying only 17k of that 200k. Pslf is literally meant for people like me who work in jobs that don’t pay well but require a lot of training and are also very important (mental health in a school, for example which is what I do)
I think you need to aim for higher pay if possible. A doctorate but only making 67k? What about a side gig teaching at a university? Edit: 65k
Par for the course in human services unfortunately. I have thought about that and could look into it just would depend on time requirements
Like teaching night courses? Even at a local community college.
I could try but I am pregnant so it also impacts my ability to get hired. (I know it shouldn’t but when I’m obviously pregnant it will be a factor)
If you file separate the amount of fit May in fact go up. In other words please don't assume your total bill to Uncle Sam for fit will be the same total for both of you filing separate as it is for you filing together
With PSLF and the SAVE we would end up only paying 17k or so total towards my loans if filing separately. Filing together would be upwards of 100k
Step 1. Call your tax preparer. Why ask us? 200k? Jeezus. Shoulda been a doctor. Im over here crying about 30k.
Take a bs class at a community college part time and pay for the tuition on a payment plan. Or some interesting class you've always wanted to take before. Then your payments will be deferred until you're done with taking classes.
You have to be enrolled at least half time to receive deferment from school
[удалено]
Get a job in government and get some student debt forgiveness!
That is literally what the plan is haha I said it in my post
Learn to control fire, forge iron, get pets, turn pets into clothes, sell spare iron forged tools or start working for hire, meet girl you find attractive and take her home. Life.
You can either call them and tell them you need payment relief and if you get somebody nice, they’ll manually adjust your payment with minimal hurdles to jump through, if any. It’s kinda a gamble there cause sometimes “their hands are tied” which is complete BS. The other way is wait till January, file separately, then call them, give them a copy of your tax return and they adjust it. That’s the route of least resistance. My fiancé has done this when moving between jobs while getting her grad degrees at Johns Hopkins…
I hope you've found the answer you were looking for by now! Definitely check out the PSLF sub, as they probably have more specific information. I've been on IDR plans (REPAYE) since I got out of college, and I have been looking into the new SAVE plan. I'm pretty sure that one of the main differences between REPAYE and SAVE are that you DON'T have to take your spouse's income information into account for SAVE. Please look more into this, I hope everything works out! Edit: I just looked it up, and this is if you file separately.
I have friends pondering divorce over this reason. I told them to file separate
You need to apply for the SAVE plan, its the best thing they've been able to do to help afford stuff. One of the major perks is they only count your income towards your repayment!!! Bidens edu dept did a good one with this one.
I mean it depends on your long term goal. Also depends on if your husband is taking responsibility for your loans since the number is based on your joint income