Price and Stevens Pass Legislation to Ensure Victims of Spousal Abuse are Able to Sever Joint Consolidation Loans

Press Release

Today, the Joint Consolidation Loan Separation Act, bicameral and bipartisan legislation introduced by Rep. David E. Price (D-NC) and Rep. Haley Stevens (D-MI) passed the House of Representatives and is now headed to President Biden's desk to be signed into law. 

"Too many Americans are struggling to repay thousands of dollars of student loan debt," said Rep. Haley Stevens. "The burden of student debt is even more painful for borrowers who are stuck trying to repay a joint loan they took out decades ago with a spouse, or ex-spouse, where the situation became abusive, absent, or otherwise financially untenable. The bipartisan, bicameral Joint Consolidation Loan Separation Act takes bold action to remedy a government oversight that has trapped borrowers in joint loans, allowing individuals and couples to sever their consolidated loans once and for all. It is high time to ensure that survivors of domestic abuse are no longer financially on the hook for their abusive partners, and I am thrilled to see this legislation headed to President Biden's desk for signature." 

From January 1, 1993 until June 30, 2006, the U.S. Department of Education issued joint consolidation loans to married couples. Both borrowers agreed at the time to be jointly liable for repayment, which proved problematic in the event of divorce. Congress eliminated the program effective July 1, 2006 but did not provide a means of severing existing loans, even in the event of domestic violence, economic abuse, or an unresponsive partner. 

The Joint Consolidation Loan Separation Act allows both borrowers to submit a joint application to the Department of Education to split their joint consolidated loan into two separate federal direct loans. It would also allow one borrower to submit a separate application if they are experiencing domestic or economic abuse or are unable to reasonably reach the other borrower.

The bill has the support of the National Network to End Domestic Violence, National Consumer Law Center, and the American Federation of Teachers.

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