Married borrowers can breathe a sigh of relief as new guidance on income-driven repayment plans promises to lighten their student loan burdens.
At a Glance
- Married student loan borrowers may see reduced monthly payments starting May 10, 2025.
- Spouses will be included in family size calculations for certain IDR plans.
- Previously, joint spousal income increased payment amounts, but new changes alleviate this burden.
- Loan servicers are updating systems to reflect this change.
New Guidance Promises Relief
The Department of Education has announced that starting May 10, 2025, spousal income will be included in family size calculations for Income-Driven Repayment (IDR) plans. This adjustment could potentially reduce monthly payments for married borrowers who file separate tax returns. Previously, the inclusion of spousal income often increased payment obligations due to higher household earnings. Married borrowers are expected to benefit significantly from these changes.
It’s no small matter that the federal student loan debt has climbed to a staggering $1.64 trillion. For the 42.7 million Americans grappling with student loans, a break in how payments are calculated is long overdue. The IDR application platform reopened in March 2025, aiming to provide much-needed financial relief to millions.
Legal Challenges Shape Policy
Recent changes stem from legal settlements involving the Department of Education and the American Federation of Teachers. A federal appeals court had earlier ruled to pause certain IDR applications, including the Save on a Valuable Education (SAVE) plan. This ruling led to a temporary shutdown, sparking a lawsuit from the American Federation of Teachers against the Department. The courts ultimately denied a motion for a temporary restraining order but scheduled further monitoring of the regulations.
“expects that by May 10, 2025, servicers will implement the treatment of spousal information for ICR, IBR, and PAYE such that married borrowers filing separate income tax returns or separated from their spouses will have the spouse counted in the family size for the purposes of calculating monthly payment amount under IDR plans.” – James Bergeron.
While the IDR application has resumed, loan servicers are actively updating their systems to comply with these latest court decisions. Hope soars for borrowers filing separate tax returns, who previously faced undue inclusion of spousal income in repayment calculations. Acting Under Secretary James Bergeron from the Department of Education underscored the significance of these revisions in aligning federal statutes.
Moving Forward: What Borrowers Need to Know
By May 10, 2025, the Department of Education plans to have fully implemented the updated guidance for the treatment of spousal data in IDR plans, such as Income-Based Repayment (IBR) and Pay As You Earn (PAYE). Under these provisions, the family size metric used to calculate monthly payments will include spouses even if borrowers file taxes separately. This implementation shows that policy changes can occasionally prioritize borrowers’ needs.
“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.” – Acting Under Secretary James Bergeron.
Despite potential missteps when implementing policies, the Department of Education worked quickly to revise its declarations and align them with federal mandates, setting a precedent for accountability. Married borrowers, in turn, can anticipate a reduction in their student loan payments, a soothing balm amidst financially staggering times.
