Joint Consolidation Loan Separation Act
Sponsored By: Senator Warner, Mark R. [D-VA]
Became Law
Summary
Lets married or formerly married borrowers split a joint Federal Direct Consolidation Loan into two separate Direct Consolidation Loans. The law requires each new loan to match the individual's share of unpaid principal and accrued interest and to keep the joint loan's interest rate.
Show full summary
- Married or formerly married borrowers: Each person can receive a separate Direct Consolidation Loan equal to their share of the joint loan. The share is calculated from the borrower's original loan obligations or, if both request, from proportions listed in a divorce decree, court order, or settlement, and the Secretary must notify each borrower about repayment and new loan terms.
- Borrowers in default: Borrowers who are in default on a joint consolidation loan may still qualify to receive separate consolidation loans under this rule.
- Application process and liability: Couples generally must apply jointly. An individual may apply alone if they certify domestic violence, economic abuse, or lack of access to the other's loan information, and if one person applies separately the other becomes solely liable for the remaining joint balance.
Personalized for You
How does this bill affect your finances?
Personalize government policy and PRIA will tell you what this bill means for your household, plus every other piece of legislation we track. PRIA reads each provision against your financial profile to show you exactly what matters to your wallet.
Bill Overview
Analyzed Economic Effects
1 provisions identified: 0 benefits, 0 costs, 1 mixed.
Split old joint federal student loans
If you had a joint federal Direct Consolidation Loan made under rules in effect on June 30, 2006, you can split it into two individual loans. Married or formerly married borrowers usually must apply together; one person can apply alone if they certify domestic violence, economic abuse, or they cannot reach the other borrower. Education can also allow a separate application when it is in the government's best financial interest, and defaulted joint loans still qualify. Each new loan equals your share of the joint debt: unpaid principal, accrued interest, and fees times your attributable percentage, based on your original share or, if both request, a divorce decree or court order. The interest rate stays the same as the joint loan's rate the day before separation. If someone applies alone under these safety rules, the other borrower becomes solely responsible for the remaining joint balance, and Education must notify both borrowers that the joint loan is repaid and share the new loan terms.
Sponsors & CoSponsors
Sponsor
Warner, Mark R. [D-VA]
VA • D
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov