Module Number 5 Married Borrowers and Repayment Paul S. Garrard Founder and President, PGPresents, LLC Independent Student Loan Consulting Spring 2019 2019 PGPresents, LLC - All Rights Reserved

In this module Impact of marital and tax filing status on IDR plans Community property states Married borrowers and refinancing with private lenders Estimating payments for married borrowers

Federal repayment plans Time driven Marital and tax filing status have nothing to do with calculation of monthly payments Income driven Marital and tax filing status may impact calculation of monthly payments, depending on plan chosen

IDRs and marital status IBR (2009) PAYE (2012) REPAYE (2015) Type loans FFEL and Direct Direct Loans only Trigger date None, all borrowers may apply New borrowers as of October 2007 Payment calculation 15% of DI*, capped at Standard 10 year 10% of DI*, capped at Standard 10 year 10% of DI*, no payment cap Repayment term 25 years (any balance left forgiven**) 20 years (any balance left forgiven**) Capitalization No limit Capped at 10% of principal Spousal income Yes, but not if filing separately Yes, regardless of filing status Income requirement Yes, borrower must demonstrate PFH*** No Interest subsidy on unsubsidized loans Yes, 50%, any time interest due higher than REPAYE amount PSLF eligible Yes, if payments on DL Yes * Discretionary Income ** Taxable *** Must demonstrate “Partial Financial Hardship” 2019 PGPresents, LLC * All Rights Reserved * www.PGPresents.com * January 2019

Community property states Money earned by either spouse while married and all property bought with those earnings considered equally owned by each spouse Community property states Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, Wisconsin When filing separately and using IBR or PAYE, half of spousal income likely reflected on return Work with loan servicer to request that spousal income be excluded from payment calculation Submit “alternative documentation of income”

Married borrowers and refinancing Spousal federal student loan debt factored into payment calculation for married borrowers using income plans that include spousal income Spousal private student loan debt not factored into payment calculation for married borrowers using income plans that include spousal income

Estimating payments Use Repayment Estimator at www.StudentLoans.gov to estimate impact of spousal income and spousal federal debt on monthly payments under income plans Use drop down menu under tax filing status section and run calculations with and without filing jointly

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