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A new bill would offer a path for federal student loan borrowers to separate their consolidated loans from a former partner’s.
The Joint Consolidation Separation Act was passed in the Senate Wednesday. The bill would allow borrowers to apply for separation from a joint consolidation through the Education Department. After approval, the remainder of the debt, including the unpaid loan and unpaid interest, would be split based on the percentage of the loan that each borrower owed at the time of consolidation.
Spousal consolidation was offered as an option for married federal student loan borrowers to join their student loans under one monthly payment with a lower interest rate.
The program ended in 2006, but it never offered an option for couples who ended their marriage to separate the consolidation, creating a sticky situation for many.
Individuals working in public service jobs who have consolidated loans, both with a current or former spouse, are not eligible for forgiveness under the Public Service Loan Forgiveness program.
The bill has gained support among many groups that advocate for survivors of domestic violence, including the National Network to End Domestic Violence.
