Married student loan borrowers received some relief this week after the US Department of Education walked back a statement that had caused concern about how monthly payments would be calculated under income-driven repayment (IDR) plans.
Previously, a top Education Department official filed a court declaration that suggested married borrowers filing separately might still have their spousal income included in IDR payment calculations.
This appeared to contradict long-standing federal rules, which allow married borrowers who file taxes separately to have their monthly payments based only on their individual income.
Under current law, “for married student loan borrowers who file separate income tax returns, the Department of Education ‘shall calculate the amount of the borrower’s income-based repayment under this section solely on the basis of the borrower’s student loan debt and adjusted gross income.’”
The alarming change came during a legal challenge led by the American Federation of Teachers (AFT), which sued over the Biden administration’s suspension of IDR processing following a federal court’s decision to block the SAVE plan.
To defend the shutdown, Acting Under Secretary James Bergeron submitted a declaration stating that by May 10, 2025, “Education expects 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.”
This prompted immediate concern from borrowers and advocates, as including spousal income could dramatically increase monthly payments for many couples who deliberately file separately to reduce their IDR obligations.
Despite this temporary resolution, the AFT lawsuit may continue with court oversight, as advocates push for accountability to make sure borrowers get access to the affordable repayment options they are entitled to.
(FORBES)
student loans repayment
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