401k Contributions and IBR Plan Question

[midwestheel]

My wife and I are currently on an IBR plan with our student loans. I had a thought last night regarding how 401k contributions affected IBR calculations, and was wondering if 401k contributions theoretically would reduce the monthly payments that we make since they decrease AGI. Do any of you have experience with this specific situation, and does it indeed decrease the monthly payment, or do 401k contributions get backed out when IBR options are being calculated?

**Would this be better placed on the Taxes forum?**

[Sean Og]

My wifes SL repayments are through an IBR plan (REPAYE specifically) and we contribute to pre tax accounts as much as we can to reduce AGI. Between us we have access to 401k, 403b, 457, TIRAs, HSA, Dependent Care FSA and her state employee pension plan.

REPAYE calculations are (AGI- 150% Poverty Level)*10% and divide 12 to get monthly payment.

There are a couple of different plans that fall under the IBR envelope. Make sure you look into them and make sure you are on the best one for your situation.

[midwestheel]

My SL are prior to the 10% cap, so I'm still at the 15%, which is fine for us financially.

Good to know that reducing AGI through 401k contributions can reduce my monthly payment. Seems like a fairly strange loophole, but if it's there, I'll use it.