IBRinfo

IBR and Married Borrowers

May 22, 2009

During the "negotiated rulemaking" process for the Higher Education Opportunity Act of 2008, the Department of Education agreed to revisit the treatment of married borrowers. While the changes aren't final, the negotiators reached consensus about fixing these problems along lines that we and our allies have proposed.

Current rule: When two married individuals both have student loan debt and file taxes jointly, they could face up to double the monthly loan payment of two unmarried borrowers in otherwise identical situations. This is because their combined income is used to calculate each spouse's own IBR payment, ignoring the fact that their joint income must be used to pay down both borrowers' debts.

Negotiated change: When a married borrower whose spouse also has federal student loans applies for IBR, they will still look at the joint income, but they will also factor in the spouse's debt before calculating IBR payments. We will update our calculator -- and tell you about it -- as soon as we know more details.

What happens now? The Department of Education still has to issue proposed regulations reflecting this agreement, and the final rule will be issued by November 1, 2009. Therefore, this rule change may not go into effect until as late as July 2010, even though IBR becomes available in July 2009. We will continue to keep you updated as things develop.