PSLF revisions: New budget proposal screws anyone in PI. Forum

[Tanicius]

My SO is going into secondary ed teaching. So she'll probably be making a little less than I will. Under the proposal, does it still work where at least you cut the combined income in half to determine to IBR eligibility?

under the current system, if you file separately then 1/2 of your combined income counts for IBR purposes. i'm assuming that's what they are proposing to eliminate. obviously they can't make you file taxes jointly but i guess you will have to provide both incomes for IBR purposes? not sure exactly.

Wait, so this would mean that, if she makes 40k as a teacher and I make 55k as a PD, for IBR purposes my income would be 95k? Is that a correct reading of the proposal? Because if so, LOL, that is beyond stupid. We just wouldn't get married.

[twenty]

In all fairness, the PAYE restrictions (i.e, counting your spouse's income regardless of filing status) presumably takes place for new borrowers post-July 1, 2015. I think you can opt-in to "new-PAYE" if you want (i.e, if you're on IBR) but the default assumption is that you'd be on the current PAYE program, even if this budget proposal passed as-is.

[patogordo]

My SO is going into secondary ed teaching. So she'll probably be making a little less than I will. Under the proposal, does it still work where at least you cut the combined income in half to determine to IBR eligibility?

under the current system, if you file separately then 1/2 of your combined income counts for IBR purposes. i'm assuming that's what they are proposing to eliminate. obviously they can't make you file taxes jointly but i guess you will have to provide both incomes for IBR purposes? not sure exactly.

Wait, so this would mean that, if she makes 40k as a teacher and I make 55k as a PD, for IBR purposes my income would be 95k? Is that a correct reading of the proposal? Because if so, LOL, that is beyond stupid. We just wouldn't get married.

that's how i'm reading it. i agree, it seems fucking retarded.

[sidhesadie]

*I do have skin in the game, btw, my wife is PSLF and this change will almost definitely mean that, even if we file separately, we will lose out on 6 figures of COD.

Wasn't sure if this got picked back up later in the thread, (still trying to sort through it all) but just wanted to make sure it's clear this plan eliminates the ability to file separately and have only the borrower's income used for PAYE/IBR. If married, BOTH incomes MUST be included. They are calling it "Closing the loophole that allowed borrowers to exclude spouse's income".

Regardless of how much of the rest of this gets through, I can definitely see that piece making it, which will make many borrowers totally ineligible for IBR/ PAYE, and debts other than federal student loans aren't factored in at all (you know, like if your spouses income covers mortgage, child care, has their own non-federal student loans, etc.)

yea this part is really gonna blow. my spouse has private student loans that don't count if we file jointly but her income still counts against as if it were all going to federal loans.

My SO is going into secondary ed teaching. So she'll probably be making a little less than I will. Under the proposal, does it still work where at least you cut the combined income in half to determine to IBR eligibility?

This is the critical point. Your incomes will be combined, regardless of how you file your taxes, and the ENTIRE AMOUNT will be considered as the income to apply to determine repayment. The ONLY thing that will "matter" is if your spouse also has federal student loans. They will count that with yours and consider the amount available for repayment of all of those federal student loans. Debts other than federal student loans will not count, including private student loans. (which many people who attended school before the gov. took the program over have). It wouldn't matter what your spouse's other debts are, or if they make more or less than you, and no getting out of it by filing separately. Incomes combined. All used for repayment. (to the other poster above -YES, your income would be considered as 95K for repayment).

[patogordo]

So everyone who wants to block this, write your red state senators about Obama's budget penalizing
marriage.

TLSPAC

it's too bad the IRS is recognizing same-sex marriages now, or we could also say that it would benefit the gays.

[worldtraveler]

I think it's clear that marriage will be a pipeline dream for the PI-oriented among us if this passes.

Maybe this is a secret conservative plan to stop the gays from wanting to marry.

[sidhesadie]

In all fairness, the PAYE restrictions (i.e, counting your spouse's income regardless of filing status) presumably takes place for new borrowers post-July 1, 2015. I think you can opt-in to "new-PAYE" if you want (i.e, if you're on IBR) but the default assumption is that you'd be on the current PAYE program, even if this budget proposal passed as-is.

Yeah ...it's the uncertainty behind the "presumably" that's the problem.

I can totally see them getting this part through for all borrowers. I've seen people arguing about this on other boards (non law school boards) screaming "why shouldn't your spouse's income count? Why should the taxpayers have to support you if your spouse doesn't" (don't ask me to explain the logic, that's just what people are saying.) I think this seems pretty reasonable to people who aren't in the situation so many of us are in.

Also really screws people who are ALREADY married...particularly with kids...what are you gonna do, get a divorce to account for student loans?

[dresden doll]

Does this mean that there is actually a benefit to getting married if your spouse makes less than you? Or is it just the greater of 1) your income or 2) your income plus your spouse's income divided by 2?

income doesn't get divided. the only benefit is you get to use the higher poverty guideline for a family of 2 instead of 1. but that's only about a 30% increase.

I see. I don't know how anyone planning on PSLF can get married right now. Or anyone looking to use PAYE really.

So everyone who wants to block this, write your red state senators about Obama's budget penalizing
marriage.


TLSPAC

Twist: the provision will be reformed to encompass all borrowers who live together in sin.

[cron1834]

Somebody needed to stop you from poisoning the damn well.

I really don't know why you're personalizing this. Your position has been more or less clear through a dozen posts in this thread, and it's not different from mine. There are only a few folks who seem to actually endorse the thrust of this change, and that's who I was referring to, particularly re: the more politicized descriptions. I may not be a successful LS grad like you, but my RC skills are at least somewhat functional, dude.

You take shots at "select spoiled rich kids" who "don't like" his post, so expect people to react. Considering two of us took issue with it, what would any person with common sense think?

I was referring to ppl who would disagree with the political characterization of pslf, as the post was clearly advocating a particular vision of government-society relations. I presume from your posting that you're not in this class. Sorry I don't have as much common sense as you. I'm going to leave this alone now so we stay on topic.

[dresden doll]

Also really screws people who are ALREADY married...particularly with kids...what are you gonna do, get a divorce to account for student loans?

I would do it, no joke. The penalty is too massive, particularly for those married couples who have kids to think about.

[Tanicius]

Also really screws people who are ALREADY married...particularly with kids...what are you gonna do, get a divorce to account for student loans?

I would do it, no joke. The penalty is too massive, particularly for those married couples who have kids to think about.

Oh whatever, I can easily pay for not just one but two $300,000 mortgages on a five-figure career salary.

[Tiago Splitter]

Also really screws people who are ALREADY married...particularly with kids...what are you gonna do, get a divorce to account for student loans?

I would do it, no joke. The penalty is too massive, particularly for those married couples who have kids to think about.

Oh whatever, I can easily pay for not just one but two $300,000 mortgages on a five-figure career salary.

Turns out you don't actually have to move out even if you get divorced.

[sidhesadie]

Also really screws people who are ALREADY married...particularly with kids...what are you gonna do, get a divorce to account for student loans?

I would do it, no joke. The penalty is too massive, particularly for those married couples who have kids to think about.

Oh whatever, I can easily pay for not just one but two $300,000 mortgages on a five-figure career salary.

Turns out you don't actually have to move out even if you get divorced.

Except I would not put it past the gov't, if you continue to cohabitate and live as if married, to accuse you of fraud. And if you live in a common law marriage state you're screwed, lol.

[Cal Trask]

Except I would not put it past the gov't, if you continue to cohabitate and live as if married, to accuse you of fraud. And if you live in a common law marriage state you're screwed, lol.

That's not how common law marriage works.

[dresden doll]

Also really screws people who are ALREADY married...particularly with kids...what are you gonna do, get a divorce to account for student loans?

I would do it, no joke. The penalty is too massive, particularly for those married couples who have kids to think about.

Oh whatever, I can easily pay for not just one but two $300,000 mortgages on a five-figure career salary.

Well, I am guessing no one would need to move out in the case of a sham divorce (and I can't imagine too many people buying that expensive of a house on that modest of a combined income either), but point taken.

[patogordo]

Also really screws people who are ALREADY married...particularly with kids...what are you gonna do, get a divorce to account for student loans?

I would do it, no joke. The penalty is too massive, particularly for those married couples who have kids to think about.

Oh whatever, I can easily pay for not just one but two $300,000 mortgages on a five-figure career salary.

if you both have federal student loans it won't really affect you. the people who are really screwed are ones where only 1 person has student loans and their spouse makes the same or more.

[A. Nony Mouse]

brb, getting a divorce.

(I've been doing the "file separately" thing and I'm pretty sure IBR was just counting my income, not half of our combined. But then we moved to a community property state which fucked everything up so had to file jointly.)

[worldtraveler]

If I get divorced, husband could get deported. So wait until he gets citizenship, then divorce, then profit?

[patogordo]

brb, getting a divorce.

(I've been doing the "file separately" thing and I'm pretty sure IBR was just counting my income, not half of our combined. But then we moved to a community property state which fucked everything up so had to file jointly.)

yea the IBR website is really unclear about this.

[sidhesadie]

Except I would not put it past the gov't, if you continue to cohabitate and live as if married, to accuse you of fraud. And if you live in a common law marriage state you're screwed, lol.

That's not how common law marriage works.

If you hold yourself out as married for X period of time, you can be considered to have a common law marriage in a common law marriage state. Hence, if you got a "secret" divorce, but continued to hold yourself out as married, cohabitate, etc (you know, so as not to crush your children) then yeah, it could be. I was not implying anyone who cohabitates has a common law marriage.

[timbs4339]

If I get divorced, husband could get deported. So wait until he gets citizenship, then divorce, then profit?

Flee to his country (if nonextradition treaty), stay married, then profit.

[Cal Trask]

I was not implying anyone who cohabitates has a common law marriage.

Ah, okay, that wasn't entirely clear.

[worldtraveler]

If I get divorced, husband could get deported. So wait until he gets citizenship, then divorce, then profit?

Flee to his country (if nonextradition treaty), stay married, then profit.

What if I wait until he is a US citizen, then renounce my own citizenship and flee to his country, then if I want to come back I apply for a spousal visa through him?

I might make some poor immigration lawyer's head explode with that plan.

[sidhesadie]

I was not implying anyone who cohabitates has a common law marriage.

Ah, okay, that wasn't entirely clear.

No prob! I am so ticked I am not being as clear as usual!

[Cal Trask]

If I get divorced, husband could get deported. So wait until he gets citizenship, then divorce, then profit?

Flee to his country (if nonextradition treaty), stay married, then profit.

What if I wait until he is a US citizen, then renounce my own citizenship and flee to his country, then if I want to come back I apply for a spousal visa through him?

I might make some poor immigration lawyer's head explode with that plan.

Divorce him after he gains citizenship, flee to his country, remarry him under forged documents (removing all of your debts), and apply for a spousal visa.