March 25, 2022

Does Revised Pay As You Earn (REPAYE) Count Spousal Income?

Repayment

You are getting married and moving on to the next chapter of your life. This is good news, but you might want to first discuss your student loans with your future spouse. This is because getting married can affect your student loans payments.

What is Revised Pay AS You Earn (REPAYE)?

REPAYE is one of the 4 income-driven repayment plans available to federal student loan borrowers. On an income-driven repayment plan, your monthly payments are based on a percentage of your discretionary income and are generally more affordable than the Standard 10-year plan.

On REPAYE, your monthly payment will generally be capped at 10% of your discretionary income. Then, after 20 or 25 years (depending on what type of loan you have), the remaining balance will be forgiven.

How are payments on REPAYE Calculated?

Payments on REPAYE are based on 10% of your discretionary income. Discretionary income, for REPAYE, is the difference between your annual income and 150% percent of the poverty guideline for your family size and location.

Does the Income of the Spouse Count in REPAYE?

Whether or not your spouse's income will be included in your monthly repayment calculation depends on two factors:

  • Your repayment plan, and
  • Your tax filing status

Married borrowers on ICR, PAYE, or IBR may file their taxes separately if they'd like to exclude their spouse's income from their monthly payment calculation. However, married borrowers on REPAYE can not exclude their spouse's income from their monthly payment calculation, regardless of their tax filing status. If both spouses have federal student loans each spouse's monthly payment will be based on their portion of the total debt. If only one spouse has student loan debt the other spouse's income will still be used to determine monthly payments under REPAYE. Depending on your spouse's income, your payments under REPAYE may be significantly higher than they would be on an alternative repayment plan.

Wrapping Up

Under REPAYE, your spouse's income will always count towards calculating your monthly payments, regardless of filing status.

Before getting married, it's important to discuss how it will impact your student loan payments and to weigh your options as a couple.

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