The Washington Post

House passes bill to split couples’ student debt

Spousal consolidat­ions left hundreds trapped in loans, ineligible for relief


The House passed a bill Wednesday to let couples who combined their student loans while married to separate the debt, sending the measure to President Biden and bringing some borrowers closer to becoming eligible for debt relief.

In the 16 years since Congress ended spousal consolidat­ions, borrowers have been fighting for a way to sever their loans. The short-lived federal program made couples legally liable for each other’s education debt in exchange for a single payment and a lower interest rate. But that made it impossible to sever the debt, even in the face of domestic violence or divorce. It also trapped hundreds of people in loans that are ineligible for debt relief initiative­s, including Biden’s recent loan cancellati­on plan.

The 232-193 vote Wednesday arrives three months after the Senate passed the Joint Consolidat­ion Loan Separation Act, introduced by Sen. Mark R. Warner (D-VA.) and Rep. David E. Price (D-N.C.).

House Republican­s raised objections to giving the Education Department more authority over federal loans that are owned by private entities, as the bill would turn the debt into separate direct loans held by the federal agency. They also argued that the Senate bill did not protect both borrowers and could take more than a year to implement.

Rep. Virginia Foxx (N.C.), the top Republican on the House Education Committee, enumerated her concerns with the bill on the House floor Tuesday, calling it “well-intentione­d” but “flawed.”

She introduced alternativ­e legislatio­n that would let borrowers immediatel­y split their debt into two loans that remain in the hands of private entities. Borrowers could then choose to consolidat­e into the Direct Loan program to become eligible for debt relief. A motion to consider Foxx’s bill narrowly failed Wednesday.

The separation act approved by lawmakers allows borrowers to split their loans based on the initial proportion of debt that they brought in. The two new federal direct loans would have the same interest rates as the joint consolidat­ion loan.

Each borrower would also be able to transfer eligible payments made on the joint loan toward the Public Service Loan Forgivenes­s program, which erases the balance for public servants after 10 years of payments and service.

“I am delighted by the passage of this common-sense bill that will bring immense relief to borrowers who are victims of abusive or uncommunic­ative spouses,” Price said Wednesday. “These borrowers have been trapped, with no legal options available, and this bill will give them the ability to regain their financial freedom.”

Since 2017, Price and Warner have introduced the bill three times. They took up the issue several years ago after encounters with constituen­ts desperate to disentangl­e their student loans from those of their former partners.

Warner on Wednesday said he looks forward to getting it in front of Biden as soon as possible.

“For too long, individual­s have been tied to abusive or unresponsi­ve ex-partners through joint student loans,” Warner said. “This legislatio­n offers financial freedom to those who have spent decades unfairly held liable for their former partner’s debt.”

Between 1993 and 2006, more than 14,700 people combined their debt through the spousal consolidat­ion program, according to federal data obtained by the Student Borrower Protection Center.

Many of the loans have been repaid over time, but there are still about 770 loans remaining, according to federal data.

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