Married Student Loan Borrowers Dodged a Payment Increase: Here’s What Happened

Student loan repayment news is breaking so fast that it’s difficult to keep track of all the changes. A recent update to the Department of Education’s declarations about how a married borrower’s payments are calculated for certain income-based plans led to confusion. 

Late last week, the Department of Education submitted a court filing that addressed married student loan borrowers enrolled in an income-driven repayment plan who had filed income taxes married but separately. 

According to the declaration, those borrowers would have their student loan payments calculated using both spouses’ combined incomes. This could mean higher monthly payments, because more income would be included.  

Previously, a spouse’s income wasn’t included, only the income of the person who was enrolled in the income-driven repayment plan was considered when calculating payments. 

On Tuesday, acting undersecretary James Bergeron updated the section of the filing to clarify. Married couples who file taxes separately or are separated from their spouses will not see a spouse’s income factored into monthly payments. 

“If spousal income were required to be reported, it could significantly increase a borrower’s monthly payments,” said Elaine Rubin, a financial aid policy expert for Edvisors. “Fortunately, as it stands now, married borrowers who file separate tax returns will only have their own income considered when calculating their IDR payments.”

Changing how student loan payments are calculated for a married borrower who files a separate tax return would require an act of Congress. “President Trump cannot change it through an executive order or even new regulations,” said Mark Kantrowitz, a student loan and financial aid expert.

However, student loan payments could rise for any borrowers who are currently enrolled in the Saving on a Valuable Education (SAVE) Plan, which was recently struck down. These borrowers have had their payments paused while legal battles over SAVE played out in court. Now that SAVE has been shot down, you’ll likely need to choose another income-driven repayment plan. You can calculate your payment options using the federal student loan simulator on StudentAid.gov.

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