Student management

House sends spouse’s student loan bill to Biden’s office

The House on Wednesday passed a bill that allows spouses who have combined student debt under a federal program to split their loans, sending the legislation to President Biden’s office.

Democrats have touted the bill to make hundreds more Americans eligible for loan forgiveness, which also allows some borrowers to escape joint loans in the event of divorce or domestic violence.

The legislation, titled the Joint Consolidation Loan Separation Act, passed by a vote of 232 to 193, with 14 GOP members joining Democrats.

Republican Representatives Steve Chabot (Ohio), Brian Fitzpatrick (Pa.), Andrew Garbarino (NY), Anthony Gonzalez (Ohio), Garret Graves (La.), Jaime Herrera Beutler (Wash.), Trey Hollingsworth (Ind.), Dave Joyce (Ohio), John Katko (NY), Adam Kinzinger (Ill.), Peter Meijer (Mich.), Tom Rice (SC), Michael Turner (Ohio) and Fred Upton (Mich.) all voted yes.

The Senate approved the bill by unanimous consent in June. Biden is expected to sign it into law — the Office of Management and Budget said earlier this week that the administration supports the legislation.

As part of this measure, borrowers who are still tied to a joint consolidation loan – taken out under a Ministry of Education program that existed for 13 years until 2006 – would be able to complete a request asking the department to split their credit in half. separate direct loans.

Some 15,000 people have signed up for the program over the years, according to federal data cited by The Washington Post, but about 770 joint loans remain unpaid.

Couples can either submit a joint application, or one person can complete their own application in situations where a borrower has experienced domestic or economic violence, or the borrower has proven they cannot obtain access to other borrower’s loan details.

The outstanding debt would be separated based on the percentage of the loan each individual originally had, and both loans would be subject to the same interest rate as the joint loan. In addition, the person would be authorized to transfer the funds paid on the joint loan to income-tested repayment programs and the civil service loan forgiveness program.

Between January 1, 1993 and June 30, 2006, the Department of Education allowed married couples to receive joint consolidation loans. According to data obtained by the Student Borrower Protection Center and reported by The Washington Post, more than 14,700 people participated in the joint consolidation program when it was in place.

The federal loan consolidation program, which made couples jointly responsible for each other’s debts, became problematic for marriages that ended in divorce, leaving some people stuck paying their exes’ loans if they refused. to cover their share of the credit.

Additionally, when Congress terminated the program in the summer of 2006, it did not allow individuals to exit their joint loan, even in cases of domestic violence, economic abuse, or being related to an insensitive partner.

The enactment of the Joint Consolidation Loan Separation Act could also open up the possibility of potential loan forgiveness for people with joint loans. According to the Department of Education’s federal student aid office, only specific consolidation loans are eligible for the civil service loan forgiveness, but borrowers may be able to get more forgiveness by separating their ready, NPR noted.

Biden announced last month that his administration was canceling up to $10,000 in federal student loan debt for borrowers who earn less than $125,000 a year, and $20,000 for Pell Grant recipients.

Some Republican opponents, however, lashed out at Biden’s student loan forgiveness plan when they opposed the legislation, saying the measure could create a pathway for more repayment — something the GOP is against. largely opposed.