You should read this entire thread:

https://forum.mrmoneymustache.com/ask-a-mustachian/gaming-repaye-and-the-student-loan-system-($148-000-debt)-to-achieve-fire-at-45/

That thread is obviously about REPAYE as opposed to IBR. I haven't looked at the differences recently but my understanding of the huge factors are as follows:

(1) REPAYE payment is based on 10% of discretionary income (AGI - 150% of poverty level), while IBR requires 15% of discretionary income (AGI - 150% of poverty level).

(2) REPAYE bases payments on both incomes whether you file jointly or separately, while IBR allows you to file separately.

(3) Under REPAYE, 50% of unpaid interest is subsidized (i.e., forgiven) on a monthly basis.

I did the math on my own student loans and came to the conclusion that REPAYE was better. Your situation might be different.

But right off the top you are paying 5% less of your discretionary income under REPAYE. That is a big sum of money over the course of a year and over the course of the repayment period.

More importantly, you are foregoing basically every deduction or exemption imaginable when you file separately, which actually increases your AGI, which in turn increases your payments. No student loan interest deduction ($2,500 per spouse per year), no standard marriage deduction, no child tax credit, no dependent care credit (if you hire a babysitter), etc. You can't even deduct contributions to a traditional IRA ($5,500 per spouse per year) or HSA ($6,500 family max).

So you guys make $110,000. I have no idea what your expenses are, but let's play with your AGI.

Income: $110,000

Max HSA: $6,500

Max IRAs: $11,000

Each contribute $10,000 to 401k: $20,000

Student loan interest deduction: $2,500

I'm not even getting into any other deductions, but with these deductions alone, your collective AGI is $70,000. Subtract 150% of the poverty line for a family of two ($23k) and your "discretionary income" for purposes of your student loan payment is $47,000. Under REPAYE, you pay 10% of this for the year, or $4,700, which is $391 per month.

Note that if you were also able to max 401ks ($36,000 total), your AGI would have been $54,000, your "discretionary income" would be $31,000, your payments would total $3,100 for the year, and your payment would be $258 per month.

Also remember that as this is going on, your payments won't be covering interest, but REPAYE comes to the rescue by subsidizing 50% of unpaid interest. This is an enormous monetary benefit that will somewhat prevent your student loans from getting crazy high due to unpaid interest.

Conversely under IBR, the only deductions from above that your spouse can take would be his 401k. So say he maxes that ($18,000), making his AGI $37,000, his discretionary income $14,000, his yearly total payment equaling $2,100 (15% as opposed to 10% under REPAYE), and his payment would be $175. Yes the payment would be lower, but no subsidized unpaid interest, and no deductions.

The point of this exercise is to show you that no matter what you choose, if you are going to be on this path long term, you need to start knocking that AGI down as much as possible. Being on IBR and filing separately really inhibits your ability to do this because you basically can't make any deductions. You need to extrapolate those deductions over the course of the repayment period to understand the consequences.