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Pingree, House Pass Bipartisan, Bicameral Legislation to Ensure Domestic Violence Survivors Are No Longer Responsible for Former Spouses' Loan Debt

Maine’s First District Congresswoman Chellie Pingree is an original cosponsor of the Joint Consolidation Loan Separation Act, legislation that aims to provide relief to borrowers who need to separate their joint consolidation loans, including separate applications for borrowers who are victims of abuse or for borrowers who are unable to get in touch with their?fellow?borrower

Washington, September 21, 2022

Congresswoman Chellie Pingree (D-Maine) and the U.S. House of Representatives today passed bipartisan, bicameral legislation to provide much-needed relief for individuals who previously consolidated their student loan debt with a spouse. Although Congress eliminated the program on July 1, 2006, it did not provide a means of severing existing loans, even in the event of domestic violence, economic abuse, or an unresponsive partner. As a result, there are borrowers across the country who remain liable for their abusive or uncommunicative spouse’s portion of their consolidated debts. The Joint Consolidation Loan Separation Act (S. 1098), introduced in the Senate by Sens. Mark Warner (D-Va.), Marco Rubio (R-Fla.), and John Cornyn (R-Texas), and in the House by Reps. David Price (D-N.C.), Greg Murphy (R-N.C.), and Haley Stevens (D-Mich.), provides relief to these individuals by allowing borrowers to split this debt. 

“All across the country, people are trapped in joint consolidation loans with abusive or uncommunicative partners. I’ve heard from several Mainers in these tough situations, which can lead to bankruptcy and garnished wages,” said Pingree, a cosponsor of the bill. “Today, Congress took common sense, bipartisan action to ensure that borrowers have full financial independence from their former partners, and I was proud to help make that a reality for vulnerable Mainers.” 

The Joint Consolidation Loan Separation (JCLs) Act will:

  • Allow borrowers to submit an application to the Department of Education to split issued joint consolidation loans (JCLs) into two separate federal direct loans. 
  • Allow two borrowers to submit a joint application to sever their JCL or allow one borrower to submit a separate application in certain circumstances, including when:        
    • One borrower is the victim of domestic or economic abuse; or 
    • One borrower has certified that the borrowers are unable to reasonably reach or access the loan information of the other borrower; or 
    • An individual application is deemed appropriate by the Secretary of Education. 

The two new federal direct loans will have the same interest rates as the joint consolidation loan.  Each borrower will be able to transfer eligible payments made on the JCL towards income-driven repayment programs and the Public Service Loan Forgiveness program. 

Background:

From January 1, 1993, until June 30, 2006, the U.S. Department of Education issued JCLs to married couples. At the time, both borrowers agreed to be jointly liable for repayment, which proved problematic in the event of divorce. Congress eliminated the program effective July 1, 2006, but it did not provide a means of severing existing loans, even in the event of domestic violence, economic abuse, or an unresponsive partner. As a result, there are borrowers across the country who remain liable for their abusive or uncommunicative spouse’s portion of their consolidated debt with no legal options for relief.

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

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