Does spouse’s loan(s) affect IDR?

As many people know if you are Married Filing Jointly you have to include both you and your spouse’s income for Income-Driven Repayment plans.  But to be fair you can also include your spouse’s external loan debt.

How this is done is the payment will be prorated based on the percentage of the total eligible debt that your servicer is servicing for the borrower.

Here is an example to help try and figure it out:

So lets say a borrower has $50,000 dollars in loan debt and the spouse has $30,000 in eligible external debt (80,000 total income).  In order to be eligible they have to be government backed student loans.  Private loans are not eligible.

Let’s say in this example that the borrowers payment was $250.00 payment based on their income.  So to figure out what a borrower will then owe you need to find the percentage of the loan debt that this servicer handles and multiple it by the total payment that borrower owes on the IDR.  So you would take (borrower income/total income) x payment amount.

If we plug in the numbers from above it would be $50,000/$80,000 x $250.00= (.625) x (250)=$156.25 payment instead of $250.00.