Warner on Senate Passing Joint Consolidation Loan Separation Act

United States Capitol
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U.S. Senator Mark R. Warner (D-VA) today applauded the Senate’s passage of the Joint Consolidation Loans Separation Act 2021a law to provide much-needed relief to people who have already consolidated their student loan debt with a spouse.

Although Congress eliminated the program on July 1, 2006, it 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 across the country who remain accountable to their abusive or taciturn spouse for their consolidated debts.

This law offers relief to these people by allowing borrowers to split this debt.

“The Senate’s passage of this common sense legislation is a huge step for survivors of domestic violence and financial abuse who have spent decades fighting for their financial freedom,” Warner said. “By finally allowing individuals to break their joint consolidation loans, this bill will provide much-needed respite to vulnerable people who are unfairly held responsible for a former partner’s debt. I urge my colleagues in the House to act urgently and send this bill to the Speaker’s office as soon as possible.

The Joint Consolidation Loan Separation Act would allow borrowers to submit a request to the Department of Education to split the Joint Consolidation Loan into two separate Federal Direct Loans. The joint consolidation loan balance – the outstanding loan and accrued unpaid interest – would be divided proportionately based on the percentages each borrower had originally contributed to the loan.

The two new federal direct loans would have the same interest rates as the joint consolidation loan. In addition, the bill would allow borrowers to access student loan relief programs, such as the Public Service Loan Forgiveness Program (PSLF) and income-tested repayment programs to which they are entitled. were previously ineligible due to their joint consolidation loans.

Senator Warner wrote the original version of the Joint Consolidation Loan Separation Act in 2017 after one of his constituents, Sara de McLean, contacted him about her struggles with a joint consolidation loan. Sara was raising two children on the salary of a public school teacher in Northern Virginia and trying to keep up with her student loan payments.

Unfortunately, her ex-husband, from whom she had divorced and from whom she had moved thousands of miles to start from scratch, refused to pay his part of their joint loan. Because joint consolidation loans create joint and several liability for borrowers, Sara risked having her public school teacher’s salary garnished if she failed to pay her and her ex-husband’s share of the debt. . Senator Warner didn’t think that was fair and sought to create a solution, so voters like Sara could control their own financial future.

You can hear Senator Warner tell Sara’s story here.

The Joint Consolidation Loan Separation Act has been supported by a number of organizations, including the National Network to End Domestic Violence, the National Consumer Law Center, the North Carolina Coalition against Domestic Violence, and the Virginia Sexual and Domestic Violence Action Alliance.

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