I applied to have both my husband's and my student loan debt
considered in determining our payments under income-based repayment.
This reduced our payments significantly. My concern is that the
repayment plan selection forms have a box to check that accepts
responsibility for your spouse's loan. My student loan debt is
considerably higher than my husband's and should I precede him in
death it appears he would be on the hook for my loans still, instead
of having them 'die' with me. Can they garnish his pension (he's a
teacher) to repay my debt in this case? Are there other concerns we
should be aware of? He plans to apply for forgiveness after 10 years
of public service for his loans; would this move affect that?
— Joanne H.
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As discussed in the Ask Kantro column,
Seeking Clarification of Income-Based Repayment for Married Student Loan Borrowers
the monthly loan payment under income-based repayment (IBR) is based
on the combined income when married borrowers file a joint federal
income tax return. These borrowers can apply to have eligibility for
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IBR based on the combined debt. The monthly payment will then be
applied to both borrowers' loans in proportion to the loan balances,
thereby replacing two monthly IBR payments with just one. This can
significantly reduce the monthly payment and may yield some savings,
especially in conjunction with public service loan forgiveness.
The repayment plan selection form
does not require spouses to accept responsibility for each other's
loans in order to have a single IBR payment applied to both borrowers'
loans. Each spouse's loans remain separate. If one spouse defaults,
the other spouse's wages cannot be garnished and the other spouse can
use an innocent spouse defense to prevent his or her share of the
income tax refund on a joint return from being offset. If one spouse
dies or becomes totally and permanently disabled, only that spouse's
loans are discharged. If one spouse qualifies for public service loan
forgiveness, only that spouse's loans are forgiven.
Parts of the repayment plan selection form can be confusing due to a
From January 1, 1993 to June 30, 2006, married borrowers could
consolidate their federal loans together into a single loan. This loan
was referred to as a joint consolidation loan
. Each borrower
assumed full responsibility for repaying the joint consolidation
loan. The statutory language concerning joint consolidation loans was
added by the Higher Education Amendments of 1992. Unfortunately, there
was no provision in this legislation for splitting a joint
consolidation loan when the borrowers got divorced. Thus joint
consolidation loans became a tie that binds beyond divorce. If one
ex-spouse failed to make his or her share of the joint payment, the
other ex-spouse would be forced to make the full payment or risk
ruining the credit scores of both borrowers by defaulting on the joint loan. To
prevent more borrowers from experiencing this problem, the provision
for joint consolidation loans was repealed by the Higher Education
Reconciliation Act of 2005 (part of the Deficit Reduction Act of
2005). Unfortunately, there are still some borrowers who have joint
consolidation loans. Congress did not provide any solutions for
borrowers who are stuck with a joint consolidation loan.
When a married couple has a joint consolidation loan and one borrower
wants to change the repayment plan, both must agree to the change since
the debt is a joint obligation. Accordingly, the repayment plan
selection form must include options relating to joint consolidation
loans. But it is easy to misinterpret the references to "IBR Joint
Consolidation Loan Repayment" as "IBR Joint Consolidation Loan
Repayment" instead of "IBR Joint Consolidation Loan
Unless a married couple has a joint consolidation loan, they should not
check the box for "IBR Joint Consolidation Loan Repayment".