Student Loan Update: How Republican Bill Would Impact Married Borrowers

Newsweek

16 hours ago

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Senate Republicans are eyeing a change to student loan payments that could have key implications for married couples.
Newsweek reached out to the Senate Health, Education, Labor and Pensions (HELP) committee for comment via email on Friday.
Why It Matters
Senate Republicans unveiled the first public draft of the reconciliation bill this week after the House of Representatives passed President Donald Trump's "Big Beautiful Bill Act" last month.
The bill would reshape the federal student loan system and includes one change from the House bill that, if not adjusted, could lead to higher payments for married couples who have borrowed student loans.
What To Know
Under current repayment plans, married couples who file their taxes as married-filing-jointly can have their income-driven repayment (IDR) plans based on their own adjusted gross income (AGI), rather than their combine income. This means they are eligible for lower monthly payments on their federal student loans.
House Republicans' restructuring of the student loan payment system under the "Big Beautiful Bill Act" would extend that treatment for married couples under current payment plans as well as for future borrowers under the proposed Repayment Assistance Plan.
However, the Senate plan appears to omit the line of text that would allow married borrowers not filing jointly to base payments on their own AGI, Forbes reported on Friday.
The House bill reads: "The term 'adjusted gross income', when used with respect to a borrower, means the adjusted gross income (as such term is defined in section 62 of the Internal Revenue Code of 1986) of the borrower (and the borrower's spouse, as applicable) for the most recent taxable year, except that, in the case of a married borrower who files a separate Federal income tax return, the term does not include the adjusted gross income of the borrower's spouse."
However, the Senate bill states: "The term 'adjusted gross income', when used with respect to a borrower, means the adjusted gross income (as such term is defined in section 62 of the Internal Revenue Code of 1986) of the borrower (and the borrower's spouse, as applicable) for the most recent taxable year,"
This could lead to higher payments, Forbes reported.
Forbes reported that borrowers under the new Repayment Assistance Plan (RAP) who have an AGI of $50,000 would pay about $208 per month under the House plan, which would allow them to file separately from their spouse. Under the Senate plan, if their spouse also makes $50,000, their payment could increase to $830 per month, regardless of how they file.
This would apply to individuals who begin borrowing student loans in July 2026. It wouldn't affect borrowers who are already on an income-based repayment plan, Forbes reported.
Earlier this year, a court filing from the Trump administration indicated they were supportive of reverting to earlier rules requiring spousal income to be counted in IDR plans but later clarified that was a mistake, reported Business Insider.
Student loan borrowers gather near the White House to urge the cancellation of student loan debt on May 12, 2022, in Washington, D.C.
Student loan borrowers gather near the White House to urge the cancellation of student loan debt on May 12, 2022, in Washington, D.C.for We, The 45 Million
What People Are Saying
Alan Collinge, founder of Student Loan Justice, told Newsweek: "The Senate should be the adult in the room with this dangerous legislation, which really is a giveaway to the student loan industry and the colleges. Instead, we're seeing them go the other way. This will hurt the GOP badly, including with their own base. I hope the wiser Republicans in the Senate will stand up to this, and include—at a minimum—the return of standard bankruptcy rights to these loans."
He described the House bill as a "massive giveaway to both the colleges and the Department of Education and its contractors," noting that it would increase student loan borrowing "like nothing we've ever seen before."
"Limits for undergraduate borrowing will increase by nearly $20,000 per borrower. This provision, alone, would add hundreds of billions onto the debt that the freshman class of '26, and every class thereafter," he said.
Senator Bill Cassidy, the Louisiana Republican who leads the Senate HELP committee, wrote in a statement: "We need to fix our broken higher education system, so it prioritizes student success and ensures Americans have the skills to compete in a 21st century economy. President Trump and Senate Republicans are focused on delivering results for American families and this bill does just that. While Biden and Democrats unfairly attempted to shift student debt onto taxpayers that chose not to go to college, Republicans are taking on the root causes of the student debt crisis to lower the cost of tuition and improve Americans' access to opportunities that set them up for success."
Sameer Gadkaree, president of The Institute for College Access & Success, wrote in a statement earlier this week: "The Senate reconciliation bill's higher education provisions would cause widespread harm to American families by making college more expensive, making student debt much harder to repay, unleashing an avalanche of student loan defaults, and rolling back basic protections for students who are defrauded by their college—all to fund tax cuts for the wealthy."
What Happens Next?
It's yet to be seen if the bill will pass in its current form or whether that measure could be amended throughout the legislative process.