Married Student Loan Borrowers: In May 2025, a new change to student loan repayment rules may significantly increase monthly payments for married borrowers. This shift comes as part of ongoing legal disputes over federal repayment plans, and it affects how spousal income is included in calculations for Income-Driven Repayment (IDR) plans. This adjustment could have large financial effects on many married Americans who are working to pay off federal student loans.
The change stems from the suspension of the Saving on a Valuable Education (SAVE) plan, which was a key part of the Biden administration’s efforts to reform student loan repayment. Under the SAVE plan, married borrowers who filed taxes separately were allowed to have their payments based only on their income, not their spouse’s.
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This method often helped reduce monthly payment obligations, especially for households where one spouse earned much more than the other or when only one partner had federal student debt.
A recent court ruling has blocked critical parts of the SAVE plan. As a result, the U.S. Department of Education must return to the older IDR rules, ET reports. This means that, starting in May 2025, spousal income will be included in loan repayment calculations, even if married borrowers file taxes separately or do not live together.
Legal and Financial Concerns
The change in repayment rules has sparked legal concerns, with the American Federation of Teachers (AFT) filing a lawsuit in March. The AFT argues that the Department of Education’s actions violate U.S. Code § 1098e, which mandates that IDR payments for borrowers who file taxes separately should be based only on their income, not their spouse’s.
Education law experts point out that the word “shall” in the law means this is a legal requirement, not just a choice. This legal conflict has led to a hearing scheduled for April 17 to address the AFT’s request for a temporary restraining order. While the Department has resumed IDR application processing, those applications are not fully being processed yet.
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Preparing for the Changes
Married borrowers who file taxes separately should start preparing for the changes coming in May 2025. It’s important to review your repayment plan and see how including spousal income will affect your payments.
Consulting a financial advisor or student loan counselor can help you understand how these changes will impact your budget and repayment strategy. Preparing in advance can help avoid surprises when the new rules take effect.
The change in repayment rules could put extra financial strain on borrowers. Financial planners and advocacy groups worry that including spousal income may lead to higher loan payments and taxes, creating a double burden for those already struggling financially.
