Married Filing Separately is Safe After Scary Statement by Dept of Ed Official

Editor's note: On April 16, 2025, the Department of Education filed a corrected declaration that removed the earlier language suggesting spousal income would be counted for borrowers who file as married filing separately. This correction confirms that borrowers can still exclude spousal income from their IDR payment calculations by filing separately.

Acting Under Secretary of Education James Bergeron recently stated in a reply to a lawsuit brought by the American Federation of Teachers:

“Education expects that by May 10, 2025, servicers will implement the treatment of spousal information for ICR, PAYE, and IBR such 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.”

This position was in direct violation of the federal statute. Only Congress can make that change, and thankfully Dept of Ed issued a correction.

Note: the above statement has been rescinded with a correction. The rest of the article will explain why Ed was forced to rescind the statement due to statute.

MOHELA website suggested something could have been changing for married borrower processing of IDR applications

See the screenshot below from mohela.studentaid.gov, which stated that as of April 15, 2025, processing for income-driven repayment (IDR) applications has resumed for single borrowers and married borrowers with no income.

This either suggests that:

1. Servicers need more time to calculate payments based on a different definition of family size that was present in old regulations, with the SAVE plan rule being blocked, OR
2. The Department of Education has ordered servicers to work on changing the way they calculate payments for married borrowers.

Edit: we now know that it's related to family size formulas needing to be modified

What do regulations say about married filing separately for student loans?

In federal regulation 34 CFR § 685.209, it says:

This regulation changed during the Biden administration. Previously, married filing separately was allowed only on the Pay As You Earn (PAYE) and (Income Based Repayment (IBR) plans. When the Revised Pay As You Earn (REPAYE) plan was changed to the Saving on a Valuable Education (SAVE) plan, the Biden Department of Education altered the terms to allow married borrowers to file separately on basically all of the IDR plans instead of just some of them.

The 8th Circuit Court of Appeals blocked the entire SAVE plan rule, and one consequence was that spouses are now counted in family size for purposes of IDR payment calculations. The earlier published statement said that income would be counted, but it meant spouse would be counted in family size. So it was a misstatement.

What federal statute says about married filing separately for student loans

For the IBR repayment plan, the statute says in 20 U.S. Code § 1098e:

“(d)Special rule for married borrowers filing separately

In the case of a married borrower who files a separate Federal income tax return, the Secretary shall calculate the amount of the borrower’s income-based repayment under this section solely on the basis of the borrower’s student loan debt and adjusted gross income.”

Nothing in the 8^th Circuit opinion targeted the IBR plan. In fact, that court even stated that they were under no power to eliminate IBR since Congress explicitly mandated it.

See below from the 8th Circuit Court ruling:

That calls out ICR plans exclusively.

So, it makes no sense to say that the broadened injunction has the consequence of blocking married filing separately for IBR repayment plans. It ignores the clear statutory text.

Republican proposals to eliminate married filing separately for student loans

Republicans have proposed eliminating married filing separate before by trying to make the REPAYE plan the only IDR option. It’s somewhat ironic that Republicans would be the ones to propose imposing a steep marriage tax for student loan borrowers paying their loans on an income-driven plan as they usually argue against that on the income tax side.

Democrats have imposed higher tax rates on married couples through tax regimes like the Affordable Care Act (ACA) investment tax for example.

However, if Republicans were to eliminate married filing separately for student loans, it would impose a 10% to 15% tax on a spouse’s income if a borrower was paying on an income-driven repayment plan before marriage.

A proposal that eliminates married filing separate is theoretically possible under a budget reconciliation bill. But without 60 votes in the Senate, this bill would have to have an expiration date within a few years.

The current IBR statute was passed during the Affordable Care Act era in the late 2000s, when Democrats had 60 votes in the Senate and could thus make the law permanent by bypassing the filibuster.

Married borrowers need to be patient and maintain their filing status

Married couples worried about higher student loan payments should stay calm during this chaotic period. Married filing separately for IBR is guaranteed in statute, and while an administration official claimed it was ending, he issued a correction that he was mistaken.

So in this case, the Department of Education made a mistake when they stated they would be using combined income for IDR payment calculation, and they will soon clarified their statement.

Borrowers should be patient, wait to amend their returns until later if applicable, and stick to their planned filing status even as student loan chaos swirls all around them.