On August 24, President Joe Biden announced broad student loan relief actions, forgiving up to $20,000 in federal student loan debt for eligible borrowers. While the much-needed relief has been celebrated by many, it’s left others —especially married couples— somewhat in the dark. Here’s what married couples need to know about student loan forgiveness:
To qualify, there are a variety of eligibility criteria you’ll need to meet, including earning below a specific income limit. However, if you are married and filed taxes jointly, you’ll be subject to different income criteria, which could leave you ineligible for forgiveness. Learn more about the student loan eligibility requirements for married couples:
Eligibility Criteria for Biden’s Student Loan Forgiveness Plan
To qualify for Biden’s student loan relief, you’ll need to meet the following requirements:
You must have federal student loans disbursed on or before June 30, 2022.
Most federal student loans qualify, such as Direct Loans and Parent PLUS Loans. It is currently unclear whether Federal Family Education Loans (FFEL) will qualify.
>> MORE: Parent PLUS loan forgiveness
You must make less than $125,000 per year, if single. Couples who file taxes jointly must earn less than $250,000 per year, combined.
Heads of households who earn less than $250,000 per year are also eligible.
If you meet the above criteria, but did not receive a Pell Grant while in school, you are eligible for $10,000 in student loan forgiveness. If you did receive a Pell Grant, you are eligible for $20,000 in student loan forgiveness.
>> MORE: Student loan eligibility requirements: Private vs Federal loans
What Biden’s Student Loan Forgiveness Means for Married Couples
If you and your spouse filed taxes jointly, you’ll need to have made less than $250,000 combined to qualify for student loan forgiveness. If your combined income was above that threshold, neither of you will be eligible.
Your 2020 and 2021 tax returns will be used as proof of income. If you filed jointly in either of those years, and your combined income was above the threshold, you may not be eligible.
However, if you are married but did not file jointly in 2020 or 2021, your eligibility for relief will be evaluated based on your income alone.
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If you want to skip pre-qualification and apply directly with a lender, you can do so by clicking Apply below.
Will Both Spouses Be Eligible?
If you filed jointly, both spouses will be eligible in cases where your combined income is less than $250,000 per year. If you are married, but did not file jointly, both spouses will be eligible in cases where your individual income is less than $125,000 per year.
Common Scenarios
Here are a few scenarios to illustrate how this will work:
Scenario 1:
Sarah and John are married and filed a joint tax return in 2021. Together, they make a combined income of $300,000. John earns $200,000 per year, and Sarah earns $100,000 per year. Sarah has federal student loan debt, while John does not.
While Sarah makes below the $125,000 individual income threshold, their combined income makes Sarah ineligible for student loan forgiveness.
Scenario 2:
Kate and Jane are married and filed taxes jointly in 2021. Together, they make a combined income of $280,000. Kate brings in $110,000 per year, while Jane brings in $170,000 per year. Both Kate and Jane have federal student loan debt.
While Kate is below the individual income threshold, because they filed jointly, Kate is ineligible for student loan forgiveness.
Scenario 3:
Luke and Miranda are married and filed taxes jointly in 2020. Together, they earn $80,000 total, with Luke bringing in $35,000 and Miranda bringing in $45,000. Both Luke and Miranda have federal student loan debt.
Because their combined income is below the income threshold for married couples, both Luke and Miranda are eligible for student loan forgiveness.
Scenario 4:
Bryce and Joe are married but did not file a joint return in 2020 or 2021. Bryce earns $110,000 per year, and Joe earns $127,000 per year. Both have federal student loan debt, however, only Bryce is eligible for student loan forgiveness as Joe’s income is above the individual income threshold.
Can I File Separately to Be Eligible for Forgiveness?
Unfortunately, you cannot retroactively file separately after filing jointly. While you can amend prior tax returns to change from married filing separate to married filing joint, you cannot do the opposite.
So, in this case, if you previously filed taxes jointly, you cannot change it. This may include instances of divorce, where you previously filed jointly in 2020 or 2021 with a now ex-spouse. However, it’s best to contact Federal Student Aid representatives directly for more information, as divorce is a special circumstance.
How to Prepare for Biden’s Student Loan Forgiveness
While the application for student loan relief has not yet been released, you can begin the process by collecting the documentation you’ll need to apply, such as:
- Proof of income, such as previous tax returns;
- Accurate address information;
- And, loan records.
You may also want to take a screenshot of your current federal loan balance prior to forgiveness. Then, after the forgiveness is said to have taken place, you can verify the amount to ensure the proper portion was forgiven.
What to Do If You Don’t Qualify for Biden’s Student Loan Relief
While President Biden’s plan, particularly the income level requirements, are intended to help families most in need of relief, it can be frustrating if you don’t qualify.
If the income requirements for married couples leaves you ineligible for student loan forgiveness, there are a few other relief options to consider:
Other Forgiveness Programs
While you may not qualify for this forgiveness program, there are others such as Public Service Loan Forgiveness, Teacher Loan Forgiveness, and Income-Driven Repayment Loan Forgiveness that you may qualify for.
Federal Direct Consolidation
If managing multiple loan payments is challenging, consolidating may help you. Direct Consolidation loans allow you to combine multiple federal loans into one, leading to one interest rate and one payment, as opposed to several. While only available for federal student loans, consolidation can simplify your payments.
Private Student Loan Refinancing
If your interest rate is of concern, refinancing with a private lender may be your best option. Be sure to weigh the pros and cons of refinancing federal student loans before doing so. If you’re interested, compare refinance rates across multiple lenders today.
>> MORE: Best student loan refinance rates
Student loan rates from our partners
Ascent
Ascent’s undergraduate and graduate student loans are funded by Bank of Lake Mills, or DR Bank, each Member FDIC. Loan products may not be available in certain jurisdictions. Certain restrictions, limitations; and terms and conditions may apply. For Ascent Terms and Conditions please visit: www.AscentFunding.com/Ts&Cs. Rates are effective as of 12/1/2024 and reflect an automatic payment discount of either 0.25% (for credit-based loans) OR 1.00% (for undergraduate outcomes-based loans). Automatic Payment Discount is available if the borrower is enrolled in automatic payments from their personal checking account and the amount is successfully withdrawn from the authorized bank account each month. For Ascent rates and repayment examples please visit: AscentFunding.com/Rates. 1% Cash Back Graduation Reward subject to terms and conditions. Cosigned Credit-Based Loan student must meet certain minimum credit criteria. The minimum score required is subject to change and may depend on the credit score of your cosigner. Lowest rates require full
principal and interest payments, the shortest loan term, a cosigner, and are only available for our most creditworthy applicants and cosigners with the highest average credit scores. Actual APR offered may be higher or lower than the repayment examples above, based on the amount of time you spend in school and any grace period you have before repayment begins.
Ascent’s undergraduate and graduate student loans are funded by Bank of Lake Mills, or DR Bank, each Member FDIC. Loan products may not be available in certain jurisdictions. Certain restrictions, limitations; and terms and conditions may apply. For Ascent Terms and Conditions please visit: www.AscentFunding.com/Ts&Cs. Rates are effective as of 12/1/2024 and reflect an automatic payment discount of either 0.25% (for credit-based loans) OR 1.00% (for undergraduate outcomes-based loans). Automatic Payment Discount is available if the borrower is enrolled in automatic payments from their personal checking account and the amount is successfully withdrawn from the authorized bank account each month. For Ascent rates and repayment examples please visit: AscentFunding.com/Rates. 1% Cash Back Graduation Reward subject to terms and conditions. Cosigned Credit-Based Loan student must meet certain minimum credit criteria. The minimum score required is subject to change and may depend on the credit score of your cosigner. Lowest rates require full
principal and interest payments, the shortest loan term, a cosigner, and are only available for our most creditworthy applicants and cosigners with the highest average credit scores. Actual APR offered may be higher or lower than the repayment examples above, based on the amount of time you spend in school and any grace period you have before repayment begins.
LendKey
1 – Terms and Conditions Apply
Loan products, terms, and benefits may be modified or discontinued by participating lenders at any time without notice. Rates displayed are reserved for the most creditworthy consumers who enroll to make automatic monthly payments. Your initial rate will be determined after a review of your application and credit profile. Variable rates may increase after consummation. You must be either a U.S. citizen or Permanent Resident in an eligible state and from an eligible school, and meet the lender’s credit and income requirements to qualify for a loan. Certain membership requirements (including the opening of a share account, a minimum share account deposit, and the payment of any applicable association fees in connection with membership) may apply in the event that an applicant wishes to apply with, and accept a loan offered from, a credit union lender. If you are not a member of the credit union lender, you may apply and become a member during the loan application process if you meet the lender’s eligibility criteria. Applying with a creditworthy cosigner may result in a better chance of loan approval and/or lower interest rate. Loans for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not available via LendKey.com.
2 – Cosigner Release
Some lenders participating on LendKey.com may offer the benefit of cosigner release. Cosigner release is subject to lender approval. In order to qualify, the borrower, alone, must meet the following requirements: (1) Make the required number of consecutive, on-time full principal and interest payments as indicated in the borrower’s credit agreement during the repayment period (excluding interest-only payments) immediately prior to the request. Any period of forbearance will reset the repayment clock; (2) The account cannot be in delinquent status; (3) The borrower must provide proof of income indicating that he/she meets the income requirements and pass a credit review demonstrating that he/she has a satisfactory credit history and the ability to assume full responsibility of loan repayment; (4) No bankruptcies or foreclosures in the last sixty months; and (5) No loan defaults.
3 – Autopay Rate Reduction
Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments.
4 – AutoPay Discount & Lowest Interest Rate
Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised APR is only available for loan terms of 10 years and is reserved for the highest qualified applicants, taking into consideration the applicant’s credit and other factors.
1 – Terms and Conditions Apply
Loan products, terms, and benefits may be modified or discontinued by participating lenders at any time without notice. Rates displayed are reserved for the most creditworthy consumers who enroll to make automatic monthly payments. Your initial rate will be determined after a review of your application and credit profile. Variable rates may increase after consummation. You must be either a U.S. citizen or Permanent Resident in an eligible state and from an eligible school, and meet the lender’s credit and income requirements to qualify for a loan. Certain membership requirements (including the opening of a share account, a minimum share account deposit, and the payment of any applicable association fees in connection with membership) may apply in the event that an applicant wishes to apply with, and accept a loan offered from, a credit union lender. If you are not a member of the credit union lender, you may apply and become a member during the loan application process if you meet the lender’s eligibility criteria. Applying with a creditworthy cosigner may result in a better chance of loan approval and/or lower interest rate. Loans for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not available via LendKey.com.
2 – Cosigner Release
Some lenders participating on LendKey.com may offer the benefit of cosigner release. Cosigner release is subject to lender approval. In order to qualify, the borrower, alone, must meet the following requirements: (1) Make the required number of consecutive, on-time full principal and interest payments as indicated in the borrower’s credit agreement during the repayment period (excluding interest-only payments) immediately prior to the request. Any period of forbearance will reset the repayment clock; (2) The account cannot be in delinquent status; (3) The borrower must provide proof of income indicating that he/she meets the income requirements and pass a credit review demonstrating that he/she has a satisfactory credit history and the ability to assume full responsibility of loan repayment; (4) No bankruptcies or foreclosures in the last sixty months; and (5) No loan defaults.
3 – Autopay Rate Reduction
Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments.
4 – AutoPay Discount & Lowest Interest Rate
Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised APR is only available for loan terms of 10 years and is reserved for the highest qualified applicants, taking into consideration the applicant’s credit and other factors.
Earnest
Student Loan Origination (Private Student Loan) Interest Rate Disclosure:
Student Loan Origination (Private Student Loan) Interest Rate Disclosure:
College Ave
College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
(1) All rates include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. If a payment is returned, you will lose this benefit. Variable rates may increase after consummation.
(2) As certified by your school and less any other financial aid you might receive. Minimum $1,000.
(3) This informational repayment example uses typical loan terms for a freshman borrower who selects the Flat Repayment Option with an 8-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7.78% fixed Annual Percentage Rate (“APR”): 54 monthly payments of $25 while in school, followed by 96 monthly payments of $176.21 while in the repayment period, for a total amount of payments of $18,266.38. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
Information advertised valid as of 12/2/2024. Variable interest rates may increase after consummation. Approved interest rate will depend on creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of the Flat Repayment Option with the shortest available loan term.
College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
(1) All rates include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. If a payment is returned, you will lose this benefit. Variable rates may increase after consummation.
(2) As certified by your school and less any other financial aid you might receive. Minimum $1,000.
(3) This informational repayment example uses typical loan terms for a freshman borrower who selects the Flat Repayment Option with an 8-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7.78% fixed Annual Percentage Rate (“APR”): 54 monthly payments of $25 while in school, followed by 96 monthly payments of $176.21 while in the repayment period, for a total amount of payments of $18,266.38. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
Information advertised valid as of 12/2/2024. Variable interest rates may increase after consummation. Approved interest rate will depend on creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of the Flat Repayment Option with the shortest available loan term.
Final Thoughts from the Nest
Due to the unprecedented nature of Biden’s sweeping student loan relief, many details are still unclear, particularly as it pertains to married couples. However, in leading up to the application release, more information is sure to arrive.
To receive updates on any changes to the program, sign up for the U.S. Department of Education’s email updates.