April 22, 2025
Under federal law, married borrowers who file taxes jointly with their spouse and are enrolled in an income-driven repayment plan will have their payments calculated based on their combined income. However, couples who file separately from their spouses will have their payments calculated based solely on their salaries
The Trump administration is walking back previous statements suggesting there would be significant changes to married student loan borrowers who filed separately, which could have resulted in higher student loan payments.
Following confusing statements from the Department of Education, the agency clarified that spousal income would not be a factor in calculating income-driven repayment plans for now.
Under federal law, married borrowers who file taxes jointly with their spouse and are enrolled in an income-driven repayment plan will have their payments calculated based on their combined income. However, couples who file separately from their spouses will have their payments calculated based solely on their salaries. Filing separately, however, comes with a cost, and couples could miss out on key deductions.
Education Dept. Creates Confusion For Married Student Loan Borrowers
In an ongoing legal battle, the Trump administration temporarily halted the income-driven repayment (IDR) system after a federal appeals court issued a new decision regarding the SAVE Plan, according to Forbes.
President Joe Biden implemented the Student Aid and Verification Enhancement (SAVE) program to reduce borrowers’ monthly payments and expedite student loan forgiveness for certain borrowers.
SAVE has been blocked since 2024, and a federal appeals court’s recent ruling expanded the injunction to block SAVE to include all the programs under it, including IDR. The Department of Education said that ruling necessitated the shutdown of IDR, as the agency requires time to update the IDR application.
Amid the legal battle, a Department of Education official filed a statement to the court indicating that spousal income would be factored into monthly payments regardless if married couples filed separately.
According to First for Women, the original statement read, “Education expects that by May 10, 2025, servicers will implement the treatment of spousal information for ICR, PAYE, and IBR such that married borrowers filing separate income tax returns or separated from their spouses will have spousal income counted for the purposes of calculating monthly payment amount under IDR plans, which is a required consequence of the Eighth Circuit’s opinion directing a broadened preliminary injunction.”
The statement was corrected this week and removes any mention of spousal income for couples who file separately.
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