Spousal Consolida�on Loans

ASK: Forgive any remaining balances for spousal consolida�on loans.

Proposed regulatory text:

In the regulatory proposal under Subpart G Waiver of Federal Student Loan Debt, add: 

(h) Joint Spousal Consolida�on Loans. The Secretary may waive repayment of the loan that was issued 

as a joint consolida�on loan under subparagraph (C) of sec�on 1078–3(a)(3) of �tle 20 (as such 

subparagraph was in effect on June 30, 2006).

Ra�onale: 

From January 1, 1993, un�l June 30, 2006, the Department of Educa�on issued joint consolida�on loans 

to married couples. At the �me, both borrowers agreed to be jointly liable for repayment, which proved 

problema�c in the event of divorce or separa�on. When Congress first eliminated the joint 

consolida�on loan program in 2006, it did not provide a means of consolida�ng commercially held loans 

into Direct Loans or a process for severing the joint consolida�on or spousal loans into individual loans. 

• As a result, many borrowers are not only le� liable for their abusive or uncommunica�ve 

spouse’s por�on of consolidated debt. 

• Even for spouses who are not in dangerous situa�ons, they remain ineligible for federal debt 

relief programs that exclude commercially held loans, including the Public Service Loan 

Forgiveness (PSLF) program. 

• Similarly, while the broader borrower community was granted relief during the student loan 

payment pause, these borrowers were excluded from the pause and were making payments the 

en�re �me. 

• Over 75,0000 borrowers con�nue to be trapped in 20-30 year old spousal consolida�on loans 

and s�ll do not have parity with the student loan borrower community.

• On October 11, 2022, the Joint Consolida�on Loan Separa�on Act (JCLSA) was signed into law by 

President Biden, a�er it passed in the Senate by Unanimous Consent and in the House of 

Representa�ves with bipar�san support. The law allows eligible borrowers to submit an 

applica�on to the Department of Educa�on reques�ng to split their joint consolida�on or 

spousal loan into two new and separate federal Direct Loans. However, this law was not enacted 

soon enough to allow those with spousal consolida�on loans to benefit from the PSLF waiver, 

and more than a year later are s�ll wai�ng for the Department to create the process for loan 

separa�on that was mandated by law. This implies that the most administra�vely feasible 

op�on to deal with these loans is to cancel them. 

• There are numerous specific examples of borrowers experiencing hardship as a result of these 

loans and the resul�ng inability to benefit from other loan relief programs. 

• During the 2021 nego�ated rulemaking and again in this current rulemaking, these borrowers 

were well represented during the public comment period, so there are ample examples on 

record of the hardship that these borrowers have experienced as a result of not being eligible 
for other relief programs and as a result of the joint nature of these loans. 

o For example, consider Dawn Marie Hayes. Dawn has been a full-�me professor at 

Montclair State University, an eligible PSLF employer, for the past 21 years. Dawn was 

the first in her family to atend college. Her mother was a single mom and Dawn le� for 

her first day of college in September 1986 from a New York City public housing project. 

She saw higher educa�on as the way to break the cycle of poverty. Given her family 

situa�on, Dawn was solely responsible for financing her college educa�on. In order to 

pursue a career as a professor of history, Dawn needed a total of 12 years of full-�me 

study. She received her Ph.D. in 1998.

During that �me, she married her husband of now 30 years, Joseph Hayes and began a 

family, which now includes seven children. As they pursued careers while raising a large 

family, they did everything they could to simplify their lives. This included consolida�ng 

their loans in December 2001, combining Joe’s $8,000 debt with Dawn’s much larger 

$74,000 burden for a total of $82,000. As of today, they have paid over $105,000 in 

interest and more than $37,000 in principal. They have not missed a payment 23 years, 

but will con�nue to be paying on this loan for another decade (un�l 2033, when Dawn 

will be 65 years old) if they are not given the ability to separate their loans or given 

addi�onal relief. The loan burden for someone who would otherwise be eligible for PSLF 

has meant a financial struggle to support a large family in one of the most expensive 

regions of the country. Although Joe and Dawn make respectable salaries, they s�ll live 

paycheck-to-paycheck, with no cash margin to provide a buffer should they encounter a 

financial emergency, and the stress and worry of encountering a hardship outside of 

their control has been, and con�nues to be, enormous.

Addi�onally, because her loan is a spousal consolidated one, she could not claim public 

loan service forgiveness in October 2017, when she would have been able to had she 

held another kind of loan. The result is that Dawn has had to pay an addi�onal 65 

months and more than $37,000 in addi�onal payments [from November 2017 - March 

2023.] During the PSLF waiver period other PSLF borrowers were issued refunds for 

overpayments but Dawn is trapped in uncertainty about her loan. As a mom of 7, this 

refund could make a major life difference to her and her family. Relief seems only fair to 

those borrowers like Dawn who have paid for so long.

o Another example comes from Sara of Virginia (whose story was the impetus for the Joint 

Consolida�on Loan Separa�on Act). Sara was raising her two children on a public-school 

teacher’s salary and trying to keep up with payments on her consolidated student loans. 

Unfortunately, her ex-spouse, whom she had divorced and moved thousands of miles 

away from, refused to pay his share of their joint consolidated loan. Due to her 

circumstance, Sara faced the threat of having her wages as a public-school teacher 

garnished if she did not pay both her and her ex-husband’s por�ons of their debt. 
Spousal consolida�on loans have been in repayment for a significant amount of �me, and many of these 

borrowers like Dawn have overpaid rela�ve to the IDR payment amounts and PSLF forgiveness they 

would have received if they had been eligible to change their loan type. For both administra�ve 

simplicity and fairness ED should not make these borrowers jump through addi�onal hoops. ED should 

simply forgive the full balance of all joint spousal consolida�on loans.