Slightly OT: Student Loan Filing Status

[dtlee]

I am trying to guide my married clients who seem to be somewhat confused in an area that I am unfamiliar in.

They attended college and one of them is going for a masters degree. They told me "we have to file Married but Single for student loan purposes." I know what filing status they are actually talking about, but have not been able to determine if they just need to know what the separate income/deductions would have been or if they actually would have to file separately for purposes of applying for financial aid (or perhaps to qualify for some student loan deferment).

Has anyone run into this with clients who work and attend school? Do you have any clues what is actually being requested? My last call with them left me a bit confused, so I will be speaking with them again later since they are trying to find where it told them this. Just wondering if anyone else has any clues they can share.

Thanks.

[ATSMAN]

I ran into this situation one. Married couple, wife quit her low paying job to get an advanced decree and applied for financial aid. The issue was that her husband still worked and made decent income that would disqualify her from sort of financial aid. She was advised by the financial aid office that if she filed single with her own W2 income she would qualify. I told her that her only option was MFS and not single unless she fell into the exceptions, which was not the case.

They were in luck because no CTC or EIC was involved so they filed MFS.

[dtlee]

I ran into this situation one. Married couple, wife quit her low paying job to get an advanced decree and applied for financial aid. The issue was that her husband still worked and made decent income that would disqualify her from sort of financial aid. She was advised by the financial aid office that if she filed single with her own W2 income she would qualify. I told her that her only option was MFS and not single unless she fell into the exceptions, which was not the case.

They were in luck because no CTC or EIC was involved so they filed MFS.

I think it is a similar situation. It seems odd that they would do better separately since the one with the loans has the higher income, but I do not have any idea how that stuff is figured.

Similar to your situation, they have nothing that would be heavily affected (yet). However, I have explained that some credits may be lost if they file separately (and need to explain that more next time I speak with them).

Thanks for the input.