Student Loan Update: How Trump Admin Changes Impact 'Marriage Penalty'
Summary
A new student loan repayment program introduced by President Donald Trump's administration may cause married borrowers to pay more each month because it counts both spouses' incomes. Experts say couples might need to file taxes separately to lower their loan payments, but this choice could reduce tax benefits.Key Facts
- The Repayment Assistance Plan (RAP) is a new income-driven student loan repayment option from the Trump administration.
- RAP could increase monthly student loan payments for married borrowers when spouses' incomes are combined.
- This effect is called the "marriage penalty," where joint income causes higher loan payments compared to filing individually.
- Prior repayment plans considered average living costs, but RAP only looks at adjusted gross income, ignoring expenses like inflation.
- Around 42 million Americans owe federal student loans, and roughly half of them are married.
- Filing taxes separately may reduce loan payments but might cause couples to lose some tax credits and deductions.
- Deciding how to file taxes requires careful comparison and may need help from tax professionals.
- Experts advise married borrowers to review repayment options and tax strategies before choosing RAP.
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