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The U.S. Department of Education recently made headlines with a surprising twist in how marriage can affect federal student loan repayments and this time, it may actually benefit borrowers.
For years, married student loan borrowers often found themselves in a frustrating position when it came to income-driven repayment (IDR) plans. Combining household incomes could increase their monthly payment amounts, even if only one spouse carried the debt. But a recent policy shift signals a more borrower-friendly approach, especially for those navigating repayment through the SAVE Plan.
What Changed and Why It Matters
Earlier this year, confusion swirled when the Department of Education released guidance suggesting that some married borrowers could see their monthly payments increase under the SAVE (Saving on a Valuable Education) Plan, depending on how they filed their taxes. The key issue was whether married borrowers filing separately could exclude their spouse’s income from payment calculations — a crucial detail that directly affects affordability.
After a public outcry and mounting concern, the department clarified and walked back its earlier position. Now, married borrowers who file taxes separately can still exclude their spouse’s income from the SAVE Plan calculation.
This means that in certain cases, getting married and filing separately can actually reduce your monthly student loan payments.
Why Filing Separately Might Help
The SAVE Plan calculates your monthly payments based on your discretionary income and household size. Typically, the higher your household income, the higher your monthly payment. That’s where tax filing status comes into play.
- Filing jointly: Your spouse’s income is factored in, potentially increasing your payment.
- Filing separately: Only your income is counted, which can lower your monthly bill.
This loophole isn’t new, it existed under previous IDR plans. But the SAVE Plan brought new attention to how it could be strategically used, especially by newly married borrowers hoping to manage high debt balances while navigating life’s other major milestones.
Real-World Example
Let’s say you make $45,000 per year and your spouse makes $80,000. If you file jointly, the SAVE Plan would base your payment on a combined income of $125,000 — potentially doubling your monthly repayment amount.
But if you file separately, only your $45,000 income is used, dramatically reducing what you owe each month under the SAVE Plan.
That’s a significant difference and one that financially savvy borrowers (and newlyweds) are now beginning to take advantage of.
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What Borrowers Should Consider Before Filing Separately
While this strategy can offer relief, it’s not a one-size-fits-all solution. Filing taxes separately can also mean losing access to other tax benefits, like:
- The Earned Income Tax Credit
- Education tax credits (like the Lifetime Learning Credit)
- Child tax credits
So before making the jump, it’s smart to speak with a tax professional or financial advisor who understands the impact of both student loan repayment and tax strategy.
Why the Department’s Clarification Matters
The Education Department’s walk-back comes at a critical time, as millions of borrowers resume repayment after years of pandemic-related pauses. It reflects growing pressure on the government to provide clarity and relief — amid the complexity of America’s student debt system.
It also demonstrates how federal policy is evolving in response to public feedback and advocacy, especially around income-driven repayment plans, which now play a key role in many borrowers’ long-term repayment strategies.
Bottom Line
Getting married no longer has to mean bigger student loan payments — at least not under the SAVE Plan, if you play your cards right. By filing taxes separately, many married borrowers can keep their payments manageable and better plan for their financial future.
As policies continue to shift, it’s more important than ever to stay informed and revisit your repayment plan annually. What worked for you last year might not be your best move this year.
Frequently Asked Questions (FAQs)
1. Does getting married always reduce student loan payments?
No, it depends on your income, your spouse’s income, and how you file your taxes. Filing jointly may increase your payments, whereas filing separately under the SAVE Plan could lower them.
2. What is the SAVE Plan?
The SAVE Plan (Saving on a Valuable Education) is a federal income-driven repayment plan designed to make student loan payments more affordable by capping them based on discretionary income.
3. Are there downsides to filing taxes separately?
Yes. Filing separately can reduce your eligibility for certain tax credits and deductions. Always weigh the pros and cons with a tax advisor.
4. How do I change my repayment plan to SAVE?
Log in to StudentAid.gov, fill out the income-driven repayment (IDR) application, and select the SAVE Plan as your preferred option.
5. How do married student loans work under the SAVE Plan?
Under the SAVE Plan, married borrowers who file taxes separately can have their monthly payment based on their individual income rather than combined household income. This often results in significantly lower payments, especially if one spouse earns much less or doesn’t have student loans.
