Some married student loan borrowers may find unexpected relief in their monthly bills following a federal policy revision that could lower payment amounts under income-driven repayment plans.
Why It Matters
More than 40 million Americans carry student debt, and recent data show delinquencies on these loans are contributing to a nationwide dip in credit scores.
These delinquencies are a major reason the average U.S. credit score recently dropped for the first time in a decade, according to CNBC.
While the Biden administration has sought to alleviate debt burdens, many of its reforms, including the new SAVE plan, have faced legal setbacks or outright rollbacks. The reversal of a Department of Education statement this week marks a reprieve for borrowers, particularly those who are married.
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What to Know
The Department of Education this week amended a previously submitted court declaration that had alarmed borrowers.
Initially, the department indicated that spousal income would be included in the payment calculations for income-driven repayment (IDR) plans—like IBR, PAYE, and ICR—even if the borrower filed taxes separately from their spouse.
The corrected declaration, however, confirms that spousal income will not be counted in those scenarios. Instead, only the borrower’s income will be used to determine payments if taxes are filed separately. This aligns with federal statutes and removes the threat of unexpected payment increases for married borrowers.
Additionally, the change could actually reduce monthly bills for some borrowers.
That’s because family size—another factor in calculating IDR payments—is now reverting to an older definition following a court injunction against the SAVE plan. Under the previous regime, a spouse is counted in the borrower’s family size regardless of tax filing status.
A larger family size lowers the required payment amount, meaning some borrowers could now pay less simply because their spouse is included in that tally.
“In fact, the amended declaration suggests that some married borrowers could actually see their payments decrease,” Attorney Adam Minsky wrote in Forbes.
This shift marks a departure from earlier policy signals under the Trump administration, which had proposed a version of the SAVE plan that would have led to higher payments for married borrowers. At the time, the Department of Education argued that excluding spousal income for those filing separately created a loophole, prompting it to suggest counting that income anyway.
What People Are Saying
Michael Ryan, a finance expert and the founder of MichaelRyanMoney.com, told Newsweek: “When the courts blocked the SAVE plan regulations, they inadvertently created a window where getting married might actually lower some borrowers’ payments… Now that we’re back to pre-SAVE rules, your spouse counts in your family size regardless of tax filing status. This creates a potential sweet spot where smart borrowers can benefit.”
Kevin Thompson, the CEO of 9i Capital and the host of the 9innings podcast, told Newsweek: “Marriage plays a vital role especially in reducing the amount of payment as Federal Poverty line thresholds are increased which may lead to lower discretionary income and lower payments. As your family continues to grow your repayment may decrease as well, due to thresholds being increased.”
Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek: “Like with other financial benefits that come with marriage, proposals for student loan payments to be lowered with starting a family are worth considering. The burden associated with those monthly payments can be elevated when you consider the additional expenses of starting a new chapter from a marriage standpoint. And while we’ve seen this administration scale back on recent student loan forgiveness plans, not eliminating the debt but making it easier for individuals starting families is a step they may pursue.”
What’s Next
The Department of Education says processing for IDR applications will resume by May 10, a necessary step as it navigates a broader legal battle surrounding the SAVE plan. A federal court recently scheduled a status conference to ensure compliance with new IDR regulations and processing standards.
Meanwhile, borrowers are advised to monitor their loan servicers and consider how their tax filing status could affect their monthly payments.
Ryan encourages borrowers to max out their pre-tax deductions, as every dollar you put into retirement accounts directly reduces your adjusted gross income and lowers student loan payments.
“What makes sense for one couple might be financial folly for another. I’ve seen marriages postponed, hastened, and financially restructured all because of student loan implications,” Ryan said.
“The most successful borrowers I’ve advised over my career aren’t necessarily the ones who found the perfect loophole. They’re the ones who stayed nimble, kept informed, and weren’t afraid to adjust their strategy when the ground shifted beneath their feet,” he said.
If you are a married student loan borrower who would like to share your story, please reach out to [email protected].
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