Will My Inheritance Increase My IBR Student Loan Payment?

Written by Steve Rhode


Dear Steve,

I have about $70,000 in student loans, currently on income based repayment and my payments are zero because of my current income. My mom has me as her sole inheritor. Her lawyer (who has since passed) told her the government won’t touch my inheritance when she dies. I think the exact opposite.

What are her options? I say change the will and leave me nothing. She doesn’t have much and it doesn’t need to repay my debt.



Dear Amy,

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I’m not an accountant and can’t give you tax advice but it seems there are some easy ways to deal with the situation. It really depends on how much of an inheritance you think you will receive.

For example, it would state in the will that the executor is instructed to disburse funds to your account with the lender.

If you got the inheritance you could always recertify your IBR with alternative documentation from the month you have to recertify.

These ways around the issue are gray for sure.

Or, you can always just receive the inheritance, report it as income on your tax return, and it will raise your AGI for the year. Your IBR payment is calculated off your tax return AGI. So for the next 12 months you’d pay a higher monthly payment until you recertify again and the payment goes back down.

The bottom line is there are multiple ways to deal with this situation.

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About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.


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