Price, Murphy, and Stevens Introduce Bipartisan, Bicameral Legislation to Provide Borrowers Relief from Joint Consolidation Loans

April 13, 2021
Press Release

Washington, DC (April 13, 2021)Today, Congressman David E. Price (D-NC), Congressman Greg Murphy, M.D. (R-NC), and Congresswoman Haley Stevens (D-MI) introduced the Joint Consolidation Loan Separation Act alongside Senator Mark R. Warner (D-VA), Senator Marco Rubio (R-FL), and Senator John Cornyn (R-TX).

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.  As a result, there are borrowers nationwide who remain liable for this consolidated debt without legal options for relief.

The Joint Consolidation Loan Separation (JCLs) Act would allow both 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 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 remainder of the joint consolidated loan will be split proportionally, and borrowers will be able to transfer eligible past payments towards income-based repayment programs or the Public Service Loan Forgiveness Program.

“This bill is a direct response to my constituent’s experience with a damaging joint consolidation loan. I introduced this bill to provide relief to borrowers who are victims of abusive or uncommunicative spouses by allowing them to sever these loans,” said Congressman Price. “The impact on borrowers is often crippling and I’m grateful for the bipartisan support that this common-sense bill has received. Congressional action is long overdue.”

“Victims of domestic violence who flee their dangerous living situations shouldn’t find themselves burdened with their partner’s debt when trying to move forward with their lives. Unfortunately, that’s the reality for some Americans who are stuck with joint consolidation loans,” said Senator Warner. “This commonsense bill would help a vulnerable population who’s been unfairly held responsible for their former partner’s debt, by giving them the ability regain their financial independence.”

“Attending college is a key part of the American Dream, but this dream is threatened by skyrocketing student loan debt,” said Congressman Murphy. “This legislation makes it easier for borrowers to reduce that burden and doesn’t punish students who experience certain unfortunate personal life events. I’m happy to be a part of this bipartisan effort to help individuals stuck in debt and I urge its passage.”

“Too many Americans are struggling to repay thousands of dollars of student loan debt,” said Congresswoman Stevens. “The burden of student debt is even more painful for borrowers who are stuck trying to repay a joint consolidation loan with a spouse, or ex-spouse, who is abusive or unreachable. The bipartisan, bicameral Joint Consolidated Loan Separation Act takes bold action for borrowers that are faced with domestic abuse or an unresponsive partner by allowing them to sever their joint loans. It is high time to ensure that survivors of domestic abuse are no longer financially on the hook for their abusive partners.”

“When survivors escape abuse, they should be able to start over without the debts of their abusers. We applaud this bill for creating a solution for those survivors who consolidated loans either in good faith or under duress and are now rebuilding their lives,” said Monica McLaughlin, Director of Public Policy at the National Network to End Domestic Violence.

“For far too long, many student loan borrowers have been stuck in joint consolidation loans, and this bill ensures that struggling borrowers, including survivors of domestic and economic abuse, who previously consolidated their student loan debts, have the opportunity to regain their financial footing," said Persis Yu, director of the National Consumer Law Center’s Student Loan Borrower Assistance Project. "The National Consumer Law Center (on behalf of its low-income clients) applauds Senator Warner and Representative Price for their efforts. This bill would benefit many vulnerable student loan borrowers, and we are proud to support it.”

“Survivors of domestic violence in North Carolina face many barriers when they decide to leave an abusive relationship; shouldering the burden of an abusive partner’s debt should not be one of them. We applaud Congressman Price for filing this bill and helping survivors get one step closer to regaining rebuild their lives and regain their financial independence,” said Kathleen Lockwood, Legal & Policy Director, North Carolina Coalition Against Domestic Violence.

A one-page summary of the Joint Consolidation Loan Separation Act can be found here, and the bill text can be found here.