Borrowers in the program can now apply to reverse their joint consolidation student loans with the U.S. Department of Education, especially in situations where domestic violence, economic abuse or divorce occurred.
10/17/2022 2:30 P.M.
2 minute read
Last week, President Joe Biden signed a law allowing married couples who consolidated their student loans to divide the debt, giving some of these borrowers the opportunity to have part of their debt erased under the new student loan debt relief program, according to USA Today.
A program that permitted married couples to combine their student loans into a single loan with a single payment and a lower interest rate was eliminated by Congress in 2006. Couples that participated in the program took on each other’s debt in a legal sense.
However, the terms of the joint loans prevented borrowers from issuing separate debts—even in situations of domestic violence, economic abuse or divorce—and barred them from applying for debt relief programs like Biden’s student loan forgiveness plan, Public Service Loan Forgiveness, or repayment plans that lower monthly payments based on income.
Last week’s action follows Biden’s announcement in August that he would forgive at least $10,000 in student loan debt for millions of students, providing Americans who are struggling with payments with long-needed relief, ACA International previously reported.
The Joint Consolidation Loan Separation Act (JCLSA) received complete bipartisan support in the Senate in June. In September, the House approved the measure by a vote of 232-193, with 14 Republicans joining the majority. U.S. Rep. David Price and U.S. Sen. Mark Warner, both Democrats from Virginia, presented the legislation.
The JCLSA will allow borrowers to split their loans based on the initial amount each partner owed into two separate direct loans that will have the same interest rates as the joint consolidation loan.
In order to receive these benefits, borrowers must apply through the U.S. Department of Education, which requires both parties to approve the separation. However, those who show evidence of domestic violence, economic abuse or who have an unresponsive partner can apply themselves.
Federal data gathered by the Student Borrower Protection Center and released by the Washington Post indicates that over 14,700 people merged their debt between 1993 and 2006. According to a recent NPR report, almost 14,000 borrowers are still bound together 16 years later.
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