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Education Department clarifies upcoming changes to income-driven loan repayment
Education Department clarifies upcoming changes to income-driven loan repayment
Education Department clarifies upcoming changes to income-driven loan repayment

Published on: 04/16/2025

Description

The Department of Education amended a student loan payment policy this week that could come as reassurance for some borrowers who were concerned their payments were about to go up.

A court declaration from the department filed in April suggested that people could be required to make higher loan payments if they were both married and making loan payments based on an income-driven repayment plan.

That declaration said 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."

The Education Department amended that declaration on Wednesday to make clear that spousal income will not be a factor in loan payment.

Now, it reads "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."

This change means not only will payments not increase, some may actually decrease. Under the rules that govern IDR plans and the SAVE Plan, family size — which may increase if a spouse is counted — is part of the calculation that determines payment amounts.

RELATED STORY | Small Business Administration will take over management of student loans, Trump says

The new filing comes as part of a lawsuit brought in March against the Trump Department of Education. Student borrowers sued after the department took down an online system that let borrowers apply for income-driven repayment. Plaintiffs argued that it wasn't legal to cut off access to those plans.

The department is working to reopen access to the IDR systems. In the latest court filings, officials indicated applications would resume by May 10, 2025.

News Source : https://www.kbzk.com/us-news/education/education-department-clarifies-upcoming-changes-to-income-driven-loan-repayment

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