# Paying for my wife's student loans



## crimson9 (Jun 29, 2013)

Hello All, I need some advice. My wife and I have been married for 6 months now. Before marriage, my then girlfriend, worked full-time and gave every indication that she would work after marriage but now she doesn't. To make matters more complicated, my wife has $70,000 worth of government sponsored student loans. Her monthly payment prior to marriage was a mere $60 / month. But since we got married and started filing taxes jointly, the payment has jumped up to $500 / month given my high income and the fact that the government will take in to account our combined income even for student loans taken prior to marriage. If we continued to file separately of course our combined tax bill would be much higher (well over 12*$500 = $6000 annually) than if we filed separately. She refuses to get a job that that would earn her $500 / month because she says that it would interfere with her long term aspirations to become a writer - which I support. She insists that next year we should file separately and I should pay the married-filing-separately-tax-rate so that she can revert back to $60 / month (which again I would pay). Otherwise, I should be happy to pay for her $500 / month student loan payment since it's helping lower my tax burden. What should I/she do?


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## ginger-snap (Apr 10, 2013)

> She refuses to get a job that that would earn her $500 / month because she says that it would interfere with her long term aspirations to become a writer - which I support.


Well, if you support it and agreed with her quitting her job, then by all means, pay up. If that's not really what you meant, then even a part time job at federal minimum wage would net a good portion of the $500 per month payment while allowing plenty of free time to write. Whatever you decide, I would not go back to paying $60 per month. Eventually, that debt will come back to haunt you both as it continues to gain in interest. You might want to get the advice of a CPA that specializes in tax law.


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## Starstarfish (Apr 19, 2012)

If when she was working full-time she only had a $60 a month payment, then for her working full-time, she wasn't apparently earning that much. What happened to her previous job? She just upped and quit? She got fired? 

If she works to "just make that $500 a month" - your payment might go even higher, as the required payment will be based on your new combined income if you file jointly. If you file separately, hers might return to the $60 a month level, or if she doesn't go back to work will go to $0 as she'll technically have no income. So - in the end, you two have to do all the calculations:

- At present, the expectations based on your income (from your salary, OP) is $500 a month if you file jointly

- If she returns to her previous job/something similiar - what effect will that have on her expected payment if you file jointly? What effect would it have if you filed separately?

There may be a breaking point where, if your income is truly that high to warrant a $500 a month payment, her only working enough to cover that payment (as you suggest) would make the financial situation -worse- rather than better. You need to carefully calculate all of this. 

- If she doesn't return to her previous job while working on getting published - if you file separately, her payment requirement may indeed be $0. However, that may or may not be "worth it" if the separate-filing penalties outweigh the current payment obligation, which you've indicated it does. 


- As to the interest compounding - while if you make a lower payment (and are allowed to, because you filed jointly) while interest is accruing at a faster rate, if your payment is $0, your loan is still considered "current" rather than in forbearance, and thus - those monthly payments of $0 or $60 or whatever it happens to be, still count towards the 25 years of payment before loan forgiveness. However, you have to make sure you are on a repayment plan that has that stipulation - so, I'd check into that.

We've recently looked into all of this ourselves.


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## crimson9 (Jun 29, 2013)

ginger-snap said:


> Well, if you support it and agreed with her quitting her job, then by all means, pay up. If that's not really what you meant, then even a part time job at federal minimum wage would net a good portion of the $500 per month payment while allowing plenty of free time to write. Whatever you decide, I would not go back to paying $60 per month. Eventually, that debt will come back to haunt you both as it continues to gain in interest. You might want to get the advice of a CPA that specializes in tax law.


The type of student loan she has is completely forgiven after 20 years. So she can make the bare minimum payments for $60 / months and 20 yrs later ($60*12*20 = $14,400) her $70,000 loan is forgiven. So the interest payments don't seem to matter that much. 

I support her writing. But there was no agreement for me to pay for her student loans indefinitely. We've just moved to a new city. She planned to go back to work after things settled down. But now she seems to not want to go back to work - ever.


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## crimson9 (Jun 29, 2013)

Starstarfish said:


> If when she was working full-time she only had a $60 a month payment, then for her working full-time, she wasn't apparently earning that much. What happened to her previous job? She just upped and quit? She got fired?


We have just moved to a new city so she left her previous job and planned to get a new job when things settled down in our new city. She's a school teacher so yes, she wasn't making a lot of money. But she was able to pay for her own living expenses. If she wanted to get something for her parents, brother, or whomever it wasn't all coming out of my paycheck.



Starstarfish said:


> If she works to "just make that $500 a month" - your payment might go even higher, as the required payment will be based on your new combined income if you file jointly. If you file separately, hers might return to the $60 a month level, or if she doesn't go back to work will go to $0 as she'll technically have no income. So - in the end, you two have to do all the calculations:
> 
> - At present, the expectations based on your income (from your salary, OP) is $500 a month if you file jointly
> 
> ...


Basically, my income is high enough that we are already in the highest tax bracket possible. We have done the math. Filing joints helps save a lot of money which out weights filing separately in all circumstances. Even if I include the $6,000 annually I would pay for her student loans (if I so chose), it still makes sense to file together. And for me paying $6,000 annually to support her student loans isn't a lot of money. But really it's a question of principles. Should I pay for her student loans indefinitely? Or should she get a job to pay for her bare minimum loan payment? Mind you she lives off me for me for everything else... 



Starstarfish said:


> - As to the interest compounding - while if you make a lower payment (and are allowed to, because you filed jointly) while interest is accruing at a faster rate, if your payment is $0, your loan is still considered "current" rather than in forbearance, and thus - those monthly payments of $0 or $60 or whatever it happens to be, still count towards the 25 years of payment before loan forgiveness. However, you have to make sure you are on a repayment plan that has that stipulation - so, I'd check into that.
> 
> We've recently looked into all of this ourselves.


Yes her loans would be forgiven in 20 yrs if we keep paying the bare minimum.


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## Starstarfish (Apr 19, 2012)

> it wasn't all coming out of my paycheck.


I think long-term, the issue here is going to be deeper than about the student loans, but about the "my money" "your money" and "our money" debate. If you are truly in the highest tax bracket then you will likely always make more money than your wife, unless indeed, she becomes a Pulitzer Prize winner author with millions in sales.

I'd say your language "it's a matter of principles" "she's living off me" indicates that this is a serious matter to discuss, as you are already getting kind of burned about the situation. 

Also - if she wants to be a writer and earn money, there are ways to do odd-jobs to earn some money. Perhaps she could look into some freelance work while she's working on her own thing.


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## ginger-snap (Apr 10, 2013)

crimson9 said:


> Basically, my income is high enough that we are already in the highest tax bracket possible. We have done the math. Filing joints helps save a lot of money which out weights filing separately in all circumstances. Even if I include the $6,000 annually I would pay for her student loans (if I so chose), it still makes sense to file together. And for me paying $6,000 annually to support her student loans isn't a lot of money. But really it's a question of principles. Should I pay for her student loans indefinitely? Or should she get a job to pay for her bare minimum loan payment? Mind you she lives off me for me for everything else...
> 
> Yes her loans would be forgiven in 20 yrs if we keep paying the bare minimum.


I get that your upset that she refuses to work now. I think that's pretty crappy to have an agreement and then back out of it unilaterally like that. Frankly, it sounds lazy. I also think it's ridiculous to have $70k in debt to be a teacher. Oy vey. But, what's done is done. 

Here's the thing. Presumably, you knew about all of this when you married her. When you marry someone, you are essentially combining your finances, for better or for worse. Therefore, what's hers is yours and what's yours is hers, for better or for worse, unless you had a pre-nup. You obviously make a high enough income to afford to pay. If you're not happy about having to pay her debts, then you need to sit her down and have a discussion about it. Now is not the time for her to quit working if you're adamant about her paying her own debts. She could at least substitute teach. There are a lot of wanna-be writers who write in their spare time and still work. She wants to be able to do it without making any of her own sacrifices.

If you didn't know about her debts, then that's an even bigger problem right there. 

I find it funny how you talk about principles, and in the same paragraph talk about not repaying the full amount so the loan is "forgiven" by the government.  I paid my (unsubstantial) debts in a low-earning career in 5 years. My husband finished a dual degree without any loans. We teamed up and made sacrifices together. *That's* a marriage.


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## Starstarfish (Apr 19, 2012)

> I also think it's ridiculous to have $70k in debt to be a teacher.


Unfortunately, a lot of that varies state by state depending on what the qualifications for teacher certification are. For example, I went to college in NY where you have to obtain a Master's degree within a certain period of time to keep your license "valid" other states only require a bachelor's, others only require a certificate that can be obtained separate from a higher degree. Some states don't even require certification - if you'll only be teaching in private/parochial schools. 

So - whether or not $70,000 is a good investment in the teaching profession obviously depends on where you are, the requirements, and what the expected salary is. As the OP didn't mentioned what state he's in, I can only surmise that at the time, his wife felt that was a legit expenditure. 

Given that the average age for first-time marriages is increasing, I'd imagine that people are less and less likely to be married when they start college. So - while it's amazing that some people had someone to share the burden with, and thus avoided student loans, I'm not sure your average 18 year old, particularly if they have limited or non-existence familial assistance is going to be in the situation that they "have someone to share the burden." So I think retroactively implying that a relationship is less than a "real" marriage because people weren't married when they went to college is a bit off.


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## ginger-snap (Apr 10, 2013)

Starstarfish said:


> Unfortunately, a lot of that varies state by state depending on what the qualifications for teacher certification are. For example, I went to college in NY where you have to obtain a Master's degree within a certain period of time to keep your license "valid" other states only require a bachelor's, others only require a certificate that can be obtained separate from a higher degree. Some states don't even require certification - if you'll only be teaching in private/parochial schools.
> 
> So - whether or not $70,000 is a good investment in the teaching profession obviously depends on where you are, the requirements, and what the expected salary is. As the OP didn't mentioned what state he's in, I can only surmise that at the time, his wife felt that was a legit expenditure.
> 
> Given that the average age for first-time marriages is increasing, I'd imagine that people are less and less likely to be married when they start college. So - while it's amazing that some people had someone to share the burden with, and thus avoided student loans, I'm not sure your average 18 year old, particularly if they have limited or non-existence familial assistance is going to be in the situation that they "have someone to share the burden." So I think retroactively implying that a relationship is less than a "real" marriage because people weren't married when they went to college is a bit off.


Alright, I'll cede the point that costs can vary. I realize that tuitions are a lot higher in some places than in others. I think there are ways around that if one is prudent, but fine. I, myself, turned down more expensive private schools in favor of a state school precisely because I didn't want such a high burden of debt for a low paying career. 

That being said, my husband was far, far from 18 when he went to college. He quit his job to go with my support. I think I am really just frustrated at the idea that someone who can afford to pay a debt would not pay it out of some "principle" that it's not his to pay. It *is* his to pay because he married her. That's how our system works, unfair though it may be. It's part of marriage. I know it's all the rage right now to "stick it" to banks and people are saying it's "prudent" to walk away from some debts, and I understand that logically, but I still disagree with it and it irks me. If it's no big deal to pay $6k annually, then it's their responsibility as a married couple to pay it, from whoever's income it comes from.


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## crimson9 (Jun 29, 2013)

ginger-snap said:


> I get that your upset that she refuses to work now. I think that's pretty crappy to have an agreement and then back out of it unilaterally like that. Frankly, it sounds lazy. I also think it's ridiculous to have $70k in debt to be a teacher. Oy vey. But, what's done is done.
> 
> Here's the thing. Presumably, you knew about all of this when you married her. When you marry someone, you are essentially combining your finances, for better or for worse. Therefore, what's hers is yours and what's yours is hers, for better or for worse, unless you had a pre-nup. You obviously make a high enough income to afford to pay. If you're not happy about having to pay her debts, then you need to sit her down and have a discussion about it. Now is not the time for her to quit working if you're adamant about her paying her own debts. She could at least substitute teach. There are a lot of wanna-be writers who write in their spare time and still work. She wants to be able to do it without making any of her own sacrifices.
> 
> ...


Well, from my perspective it's about as "principled" as anyone can get. We are following the law of the land. These types of loans are given to people pursuing fields such as teaching to provide them relief from paying high student loans in fields where they will find it hard to repay the loan. So, yes, I'm fine with loan forgiveness - especially since its the law.
_Posted via Mobile Device_


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## Allltuvx (Jul 16, 2013)

If student loans are forgiven after 20 years, don't you still have a bad credit rating because of this for the next 7 years after the loan is forgiven.

And a bad credit rating affects so many things now.

Is your work very secure with the high wage.

And your wife just may become a successful writer. If she is spending hours honing her writing then she is serious about it. As in 8 hours a day. Many writers write then spend the rest of the time studying other writers or grammar or technique. Then submit their work several times. Or they write articles. Or blogs. Lots of ways she would be showing she is seriously working at this.


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## EleGirl (Dec 3, 2011)

What state do you life in? If you are in a community property state like California you would each have to claim 50% of your income and put 50% of the higher tax burden. So this is something to consider.

Also, if paying the married but separate tax is higher than the student loan payments of $500 then pay the loan payments and file joint. 

If you don't want to pay her student loan debt than either tell her to get a job or divorce her. The bitterness that will build up over your feeling that it's unfair for you to pay the debt is not worth it.


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