Here’s what you need to know about the changes and how to proceed.
The Department of Education has resumed some IDR application processing and reversed a rule that would have counted spousal income even when filing taxes separately. Key changes for student loan borrowers were announced by the U.S. Department of Education on April 15, 2025, as quoted in a report by Hindustan Herald.
What’s the update on student loan repayment?
A significant update released by the U.S. Department of Education impacts millions of borrowers of federal student loans, especially those enrolled in income-driven repayment (IDR) plans.
The department confirmed that IDR processing has resumed for specific borrower groups following a months-long suspension of application processing, as per a report by Hindustan Herald.
The Department of Education announced on April 11 that only borrowers filing taxes as single or married borrowers reporting no income will now be able to resume processing IDR applications, specifically for Income-Contingent Repayment (ICR), Income-Based Repayment (IBR), and Pay As You Earn (PAYE) plans.ALSO READ: Big exposure: Blake Lively accused of exploiting Justin Baldoni’s good nature in bid to take over creative control of ‘It Ends With Us’ filmOne of the department’s contracted loan servicers, MOHELA, verified these updates. Most applications, though, are kept on hold until full-scale processing is resumed.
When will full IDR processing resume?
Full processing is expected to resume by May 10, 2025, providing borrowers with new clarity after months of legal disputes and policy confusion.
In order to continue moving toward loan forgiveness under the IDR pathway or Public Service Loan Forgiveness (PSLF), borrowers who are presently in SAVE plan forbearance may apply to switch to alternative IDR plans.
What does the spousal income clarification mean?
A Department announcement had frightened borrowers by suggesting that, even for married borrowers filing separately, spousal income would be taken into account when calculating monthly payments for ICR, IBR, and PAYE. For many, this would have meant much larger monthly payments, as per a report by Hindustan Herald.
However, the Department clarified in an updated declaration released on April 15.
For married borrowers filing separately or those who are not living with their spouse, spousal income will not be taken into account when calculating payments.
In order to determine the income threshold for IDR calculations, spouses will still be taken into account when calculating family size.
Thousands of borrowers were relieved by this reversal, especially those with complicated tax filing circumstances.
These events come after a few tumultuous months. A federal appeals court decision halted IDR processing related to the SAVE plan in February 2025. The American Federation of Teachers (AFT) sued in March, claiming that the IDR application shutdown was illegal.
This lawsuit and growing public pressure prompted the Department’s most recent actions.
What steps should borrowers take now?
To regain eligibility for IDR or PSLF forgiveness, borrowers with federal student loans in SAVE Plan Forbearance should think about transferring to PAYE, IBR, or ICR.
The income threshold will be slightly raised if they are married and filing separately because their spouse will be included in household size and spousal income will not be factored into their monthly repayment calculation.
In order to prepare for any potential retroactive adjustments, borrowers who are awaiting processing should check their StudentAid.gov account, get in touch with MOHELA or their designated servicer for real-time updates, and keep a record of all correspondence.
While this is a step forward, the student loan system remains in flux. With ongoing lawsuits, political shifts, and past servicing issues, borrowers should stay proactive and informed.
FAQs
Does my spouse’s income count if we file our taxes separately?
No. If you are married and file separately, your monthly IDR payment will be unaffected by their income.
When will IDR processing fully resume?
Full processing is expected to resume on May 10, 2025.
