Student Loan Payments Now Count Against Income for Food Assistance Eligibility

The Student Loan Deduction Act of 2025 is a straightforward but significant change to how the government calculates eligibility for food assistance benefits. Starting 180 days after it becomes law, households can begin deducting their monthly student loan payments from their countable income when applying for or recertifying benefits. This applies to both standard federal loans (Title IV of the Higher Education Act of 1965) and private education loans (as defined by the Truth in Lending Act).

The Real-World Math: Lowering the Income Bar

For anyone juggling student debt and relying on food assistance, this change is huge. Currently, your loan payment—a mandatory expense—doesn’t count against your income when determining if you qualify for help. This bill essentially recognizes that if you’re paying $300 a month to Sallie Mae or the Department of Education, that’s $300 you don’t have for groceries. By allowing this deduction, the bill lowers a household’s calculated income, which can either make a household eligible for benefits when they weren't before, or increase the amount of benefits they receive.

Think about a single parent working two jobs whose calculated income is just over the limit for food assistance. If they have a $250 monthly student loan payment, deducting that amount could drop their countable income below the threshold, securing them much-needed help. This provision directly addresses the financial squeeze faced by low-income borrowers, many of whom are stuck between servicing debt and feeding their families. It’s a practical fix designed to keep people from falling off the benefit cliff due to unavoidable debt obligations.

The Fine Print: Who Pays Matters

There’s one critical detail in Section 2: the deduction only counts for the amount the household actually pays out-of-pocket. If a third party, like an employer or a relative outside the household, covers part of the loan payment, that portion cannot be deducted. This makes sense from an accounting perspective—the government is only concerned with the money you are spending. However, it means households need to be extremely clear when reporting their payments, especially if they use any kind of co-signer or assistance program that routes funds directly to the lender. For most people making standard payments, this won’t be an issue, but it’s a detail that could trip up some applicants if the rules aren't clearly communicated by the administering agencies.