What is the Student Loan Forgiveness Income Limit For Married People Filing Jointly?

Proud college graduate smiles after graduation with her husband and elementary age son.
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There have been weeks of waiting on the Biden Administration to discuss actions for student loan debt as the August 31 repayment deadline has been looming. On Wednesday, August 24, the president put forward new relief measures to help 43 million Americans who carry large loan balances.

See: Biden Cancels $10K Student Loans with Additional $10K for Pell Grant Borrowers
Find: How Can I Apply For Federal Student Loan Forgiveness?

The new relief includes canceling $10,000 of debt per borrower, an additional $10,000 of loan forgiveness for those who have Pell Grants and a monthly loan payment cap of 5% of an individual’s income. In addition, the hold on all payments has been extended through December 31.

The new options impact many — but not all — individuals and families that have been saddled with mounting student loan debt. As part of the plan, there are income caps for those who qualify to take advantage of these benefits.

When it comes to married people filing jointly on taxes, the maximum income limit is $250,000 for the household. Anyone making at or under that figure is eligible for the new program; anyone making over that amount will not be eligible. The reason is that the administration wants to be sure that the families that need the relief most are able to get it. 

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“No high-income individual or high-income household — in the top 5% of incomes — will benefit from this action.”

White House Statement

According to the Federal Student Aid office of the U.S. Department of Education, how you file taxes with your spouse is important in determining how you will repay student loans, so it may be time to re-evaluate with a tax preparer for 2022. 

As the office noted, if you file a joint tax return, the government will use a joint income for an income-driven repayment (IDR) plan. And if both you and your spouse carry student loan debt, payments will be reduced to reflect those combined balances when filing jointly. And you must recertify your household status and income each year to stay on the IDR plan.

See: Student Loan Repayments Would Be ‘Catastrophic’ for These Struggling Families
Student Loans: Biden Forgives an Additional $10K For Pell Grant Borrowers

However, if you and your spouse file taxes separately, they will use each individual income level to determine repayment amounts. The Federal Student Aid office’s website lists helpful charts and scenarios to determine where you might fall in repayment options.

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About the Author

Selena Fragassi joined GOBankingRates.com in 2022, adding to her 15 years in journalism with bylines in Spin, Paste, Nylon, Popmatters, The A.V. Club, Loudwire, Chicago Sun-Times, Chicago Tribune, Chicago Magazine and others. She currently resides in Chicago with her rescue pets and is working on a debut historical fiction novel about WWII. She holds a degree in fiction writing from Columbia College Chicago.
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