Spousal income and student loans

[akitavet]

Anyone know how this works? I imagine at the graduate level that parental income doesnt make a difference, but Im sure spouse income does. IfI fill out FAFSA and apply for student loans, will I not qualify for a lot of government aid because of the middle class paradox (dont make enough to actually pay for school, but make too much for aid)? Will I be looking at private student loans at much higher rates? Anyone have any experience in this area?

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[tapir]

You're guaranteed up to 40,500 in staffords (as of this year), regardless of income/assets.

 

[akitavet]

Im always so grateful to hear good news DO you happen to know what kinds of rates for the staffords are available? I have never had student loans before (in case you cant tell LOL) and Im not totally sure how all this works. I just wonder if its worth it to take all you can get even if you do make a little money in the summers or whatever and then pay back any leftovers right away at the end of school just because it so beats credit card debt or whatever other kind of loans (financing a computer, etc).

 

[tapir]

I believe the stafford rates are relatively high right now (not sure exactly - 5.5 - 6.5%), but unlike credit card debt, the interest is tax deductible (to a certain point - I think there's a $2500 annual limit) and you can get deferments/forbearances. If you have existing credit card debt, it wouldn't be a terrible idea to pay that off with stafford loans at the beginning (if you can afford to do so and still have enough borrowed to meet your needs for the year). Remember though that all but the first 8500 of your annual staffords will be unsubsidized, meaning that interest will be accruing even while you're in school. So it's best not to borrow more than you need, or at least to pay back any extra you have at the end of each year.

Also, the good news is that stafford rates will be steadily dropping over the next 4 years, to a low of I think 3.5% (thanks, democratic congress!)

 

[kate_g]

I believe the stafford rates are relatively high right now (not sure exactly - 5.5 - 6.5%)

I believe it's 6.8%, fixed. (They used to be variable-rate loans, this changed I think last year.)

Remember though that all but the first 8500 of your annual staffords will be unsubsidized, meaning that interest will be accruing even while you're in school.

I *think* that you're not necessarily guaranteed to get $8500 subsidized. Here's where the middle-class paradox comes in. Whether you qualify for any subsidized Staffords (and how much you qualify for - I *don't* think it's $8500 or nothing) is based on your need - and spousal income/assets are included in that calculation.

Also, the good news is that stafford rates will be steadily dropping over the next 4 years, to a low of I think 3.5% (thanks, democratic congress!)

I thought so too, but it seems that the rate drop is actually just for undergrad loans. If anyone has information to the contrary I'd love to hear it...

 

[hoodle]

Whether you qualify for any subsidized Staffords (and how much you qualify for - I *don't* think it's $8500 or nothing) is based on your need - and spousal income/assets are included in that calculation.

I'm assuming they don't count same-sex partners as spouses, right? Maybe having a ridiculously conservative legislature will give me at least one bonus...

 

[runnerDC]

yes, those of us with same-sex partners can perhaps use the paradox of law to our advantage this once.
of course, i can't express how crazy-making it was and how angry it made me to have to essentially ignore my partner's existence in all of the official paperwork, b/c, yes, for federal and institutional aid purposes, it's like they don't exist.

 

[tapir]

I *think* that you're not necessarily guaranteed to get $8500 subsidized. Here's where the middle-class paradox comes in. Whether you qualify for any subsidized Staffords (and how much you qualify for - I *don't* think it's $8500 or nothing) is based on your need - and spousal income/assets are included in that calculation.

Yeah, I think you're right about that, but at least parental assets aren't figured (unlike health prof. and perkins loans). My impression is that most people do qualify, but maybe a current student can chime in. In any case, it's not like the subsidy on the 8500 is a dealbreaker considering the overall debt .

I thought so too, but it seems that the rate drop is actually just for undergrad loans. If anyone has information to the contrary I'd love to hear it...

I think you're right - hopes DASHED.

 

[MissBehavior]

You're guaranteed up to 40,500 in staffords (as of this year), regardless of income/assets.

Is this annually, or in total?

 

[runnerDC]

You can get up to $8500 per year from the subsidized (interest does not accrue on the loan while you are in school) Stafford. This is need-based, though, so the amount could slide anywhere between $0 and $8500 based on your assessed need.

You can get up to $32000 per year from the unsubsidized (interest does accrue on the loan while you are in school) Stafford. This is NOT need-based, so you can take as much or as little as you feel you need up to that amount, but not to exceed the total cost of attendance at your chosen school.

Combining the subsidized and unsubsidized portions ($8500 + $32000) is where the annual $40500 limit comes from.

The lifetime limit for health professional students from combined subsidized and unsubsidized Stafford loans is $189125. Note, though, that this amount INCLUDES any outstanding Stafford balance that you may be carrying from previous undergrad and/or grad experience.

Financial aid offices are usually very helpful in explaining all of this to you, so do feel free to call them and pick their brains.

 

[tapir]

Thanks, runnerDC. Though I think that the stafford annual limit is 40,500 in any case - if you don't get any portion of the subsidized 8,500, you can borrow the equivalent in unsubsidized.

 

[kate_g]

This is NOT need-based, so you can take as much or as little as you feel you need up to that amount, but not to exceed the total cost of attendance at your chosen school.

Note to single parents or dual-student households with kids: The cost of attendance is, of course, calculated assuming a single young student with no dependents. Some schools may be really inflexible about their cost of attendance, but I believe they *can* (and some will) file something on your behalf that will let you borrow more than their estimated cost of attendance if your actual needs are higher (you might need documentation to support your claim).

 

[Serendipity4]

So when you speak of "cost of attendance," is that solely limited to tuition, or is that tuition and the cost of living expenses that the schools figure out? (Sorry to be so ignorant in this area!)

 

[runnerDC]

the cost of attendance should include everything. each school knows its tuition & fees and estimates living expenses, transportation, etc, for its students. we could all argue, though, how realistic their estimates are given individual family/life situations, etc.

 

[Serendipity4]

the cost of attendance should include everything. each school knows its tuition & fees and estimates living expenses, transportation, etc, for its students. we could all argue, though, how realistic their estimates are given individual family/life situations, etc.

Thanks, runnerDC!

 

[MissBehavior]

Thanks for the info, everyone!

 

[CookieBear]

I've been itching to ask these questions, but hesitated because I thought I'd re-read this whole thread again, and do more research myself, but, I haven't had a good chance to do that yet.

So, in case anyone has already gone to these lengths or depths of thought, here's what I'd like to know:

If I get married now (before school starts, let's say), I will then need to declare my spouse's income next year (FAFSA) for my second year of vet school. There's also a home involved, so I assume that becomes an asset to declare, too, for us, at that point.

Will that totally screw me on possible loans? No, right? I'm still entitled to borrow as much as Uncle Sam will allow me, regardless of married/single status? (And whatever other banks would loan me privately).

This year, my aid (if any) will probably suck, since I've been earning a decent salary, until I leave my job this summer.

But next year, if I don't get married, and therefore would be single, I'd be a poor lowly grad student, without my past salary. Would I be better off that way, as far as loans, or aid? I.E., poor single student vs. theoretically still poor, but married student?

I'm guessing that my age and past earnings are going to negate any/all chances of "aid" (as I had in my undergrad days). I assume I'm only going to be offered loans. I'm 30, so, independent, living away from mom, etc.

Thoughts? Ideas? Insults? ( )

Sorry if I'm raising an already-discussed-perhaps-dead issue.

 

[wildfocus]

I've been itching to ask these questions, but hesitated because I thought I'd re-read this whole thread again, and do more research myself, but, I haven't had a good chance to do that yet.

So, in case anyone has already gone to these lengths or depths of thought, here's what I'd like to know:

If I get married now (before school starts, let's say), I will then need to declare my spouse's income next year (FAFSA) for my second year of vet school. There's also a home involved, so I assume that becomes an asset to declare, too, for us, at that point.

Will that totally screw me on possible loans? No, right? I'm still entitled to borrow as much as Uncle Sam will allow me, regardless of married/single status? (And whatever other banks would loan me privately).

This year, my aid (if any) will probably suck, since I've been earning a decent salary, until I leave my job this summer.

But next year, if I don't get married, and therefore would be single, I'd be a poor lowly grad student, without my past salary. Would I be better off that way, as far as loans, or aid? I.E., poor single student vs. theoretically still poor, but married student?

I'm guessing that my age and past earnings are going to negate any/all chances of "aid" (as I had in my undergrad days). I assume I'm only going to be offered loans. I'm 30, so, independent, living away from mom, etc.

Thoughts? Ideas? Insults? ( )

Sorry if I'm raising an already-discussed-perhaps-dead issue.

actually, you don't have to file taxes jointly if you don't want to (but you will have to decide who gets the house credits), so you don't have to declare your husband's income on the fafsa. have you ever compared your taxes singly versus jointly? we file jointly, b/c it saves my spouse $$, but we also get to combine all our deductables.

as to loans, from my understandng, you can borrow as much as anyone else despite being legally bound to another.

so, marry away if you wish!!

disclaimer - i have NO experience in financial planning or advice, so you will want another opinion for sure!!

EDIT: YES YOU DO HAVE TO DECLARE SPOUSE ON FAFSA - see my post below (sheepishly embarrased as i am)

 

[chris03333]

Thanks, runnerDC. Though I think that the stafford annual limit is 40,500 in any case - if you don't get any portion of the subsidized 8,500, you can borrow the equivalent in unsubsidized.

Not for med students (includes vet school.) The annual limit is max offord for both together.

 

[sms25]

I included my husbands income (we always file together) and still got the max $8500 subsidized (and all of the $30,000 I was asking for). Even when I first got married (I got married in the middle of the year and I was 23 years old) the FAFSA made me include my husband AND my parent's income and I still got all the money I needed for grad school that year (about $15k). I don't know this for a fact, but I think everyone gets the max amount of loans (everyone I've spoken to anyway) regardless of marital status and spousal income, at least in grad school. I guess your school's financial aid counselors would know better.

 

[wildfocus]

I included my husbands income (we always file together) and still got the max $8500 subsidized (and all of the $30,000 I was asking for). Even when I first got married (I got married in the middle of the year and I was 23 years old) the FAFSA made me include my husband AND my parent's income and I still got all the money I needed for grad school that year (about $15k). I don't know this for a fact, but I think everyone gets the max amount of loans (everyone I've spoken to anyway) regardless of marital status and spousal income, at least in grad school. I guess your school's financial aid counselors would know better.

i'm trying to remember where in the application it even asks for the spousal information. i know i would have included all his info b/c we file jointly, and its just second nature at this point, but i don't really recall any additional questions other than the tax stuff... in fact, i know i read that if you file singly, NOT to include your spousal info (except marriage date, etc.). of course, i can't find right now. putting on my detective cap and will be back...


i'm back - everything i read contradicts what i mentioned before!! cookie - you will have to list all of his assets too! sorry! but you can borrow as much as anyone else (no discrimination there). pm me if you want to know my numbers - and what they say i am responsible for... may give you an idea of what to expect.

 

[kate_g]

Will that totally screw me on possible loans? No, right? I'm still entitled to borrow as much as Uncle Sam will allow me, regardless of married/single status?

Your spouse will be expected to make a "reasonable contribution" to your education, which will reduce your calculated "need". If he has a decent job, this probably means you won't qualify for need-based grants. I would have said it might eat into the amount of subsidized Stafford you get, but others here have suggested you'll probably still be eligible. You should be able to borrow the full amount of regular Stafford though, because you can take those loans regardless of how rich you are (the government makes money on the loan, so they're not going to tell you that you *can't* borrow even if they think you *could* pay out of pocket).