Senator Warner and Rep. Price Applaud Passage of Joint Consolidation Loan Separation Act – Press Releases

WASHINGTON — Today, Sen. Mark Warner (D-VA) and Congressman David Price (D-NC) welcome the passage of their bipartisan, bicameral legislation, the Joint Consolidation Loan Separation Act, which will now move toward President Biden’s office to be signed into law.

“For too long, individuals have been tied to abusive or insensitive ex-partners through joint student loans,” said Senator Warner. “This legislation offers financial freedom to those who have spent decades unfairly held accountable for their former partner’s debt. I am thrilled to see the House of Representatives pass this legislation and look forward to bringing it to President Biden as soon as possible to begin delivering relief to borrowers.

“I introduced this bill in direct response to a voter’s experience with a joint consolidation loan for which he remained fully responsible after a divorce. I welcome the passage of this common sense bill which will bring immense relief to borrowers who are victims of abusive or uncommunicative spouses,” said Congressman David Price. “For decades, these borrowers have been trapped, with no legal options available, and this bill will give them the opportunity to regain their financial freedom. I look forward to seeing this bill hit the president’s desk and go to US federal borrowers.

From January 1, 1993 to June 30, 2006, married couples were able to combine their student loan debt into joint consolidation loans. The two borrowers agreed at the time to be jointly responsible for repayment, which proved problematic if they wanted to separate the loans. Congress eliminated the joint consolidation program effective July 1, 2006, but did not provide a way to break existing loans, even in cases of domestic violence, economic abuse, or an unresponsive partner. As a result, there are borrowers nationwide who remain liable for this consolidated debt without legal options for relief.

The Joint Consolidation Loan Separation Act (JCLS) would allow two borrowers to submit a joint application to the Department of Education (ED) to split their joint consolidated loan into two separate Federal Direct Loans. It would also allow a borrower to submit a separate application if they are a victim of domestic or economic violence or are unable to reasonably reach the other borrower. The balance of the joint consolidated loan will be distributed proportionately.

Although the universe of borrowers still making payments on a joint consolidation loan is relatively small, this legislation would greatly benefit individual borrowers who need the most help (including abuse victims and those who cannot not get in touch with their ex-spouse).

This bill has the support of the National Network to End Domestic Violence, the National Consumer Law Center, the American Federation of Teachers, the North Carolina Coalition Against Domestic Violence, and the Virginia Sexual and Domestic Violence Action Alliance. This bill was included in the Higher Education Act (HEA) Reauthorization of the Education and Labor Committee at the last two Congresses.


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