Joint Consolidation Loan Separation Act
Bill: S.1098 | Sponsor: Sen. Warner, Mark R. (D-VA)
Policy area: Education

Summary:
Joint Consolidation Loan Separation Act
This act allows two borrowers, who had previously received a joint consolidation loan for their federal student loan debt, to submit a joint application to the Department of Education to sever their consolidated loan into two separate loans.
One borrower may submit a separate application in the event that the individual has experienced domestic or economic abuse from the other individual borrower or is unable to reasonably reach or access the loan information of the other borrower. In the case of a borrower who receives a separate consolidation loan due to those circumstances, the other individual borrower must become solely liable for the remaining balance of the joint consolidation loan.

[117th Congress Public Law 200]
[From the U.S. Government Publishing Office]



[[Page 136 STAT. 2219]]

Public Law 117-200
117th Congress

                                 An Act


 
  To amend the Higher Education Act of 1965 to authorize borrowers to 
    separate joint consolidation loans. <<NOTE: Oct. 11, 2022 -  [S. 
                                1098]>> 

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled, <<NOTE: Joint 
Consolidation Loan Separation Act. 20 USC 1001 note.>> 
SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Joint Consolidation Loan Separation 
Act''.
SEC. 2. SEPARATING JOINT CONSOLIDATION LOANS.

    (a) In General.--Section 455(g) of the Higher Education Act of 1965 
(20 U.S.C. 1087e(g)) is amended--
            (1) by striking ``A borrower'' and inserting the following:
            ``(1) In general.--A borrower''; and
            (2) by adding at the end the following:
            ``(2) Separating joint consolidation loans.--
                    ``(A) In general.--
                          ``(i) Authorization.--A married couple, or 2 
                      individuals who were previously a married couple, 
                      and who received a joint consolidation loan as 
                      such married couple under subparagraph (C) of 
                      section 428C(a)(3) (as such subparagraph was in 
                      effect on June 30, 2006), may apply to the 
                      Secretary, in accordance with subparagraph (C) of 
                      this paragraph, for each individual borrower in 
                      the married couple (or previously married couple) 
                      to receive a separate Federal Direct Consolidation 
                      Loan under this part.
                          ``(ii) Eligibility for borrowers in default.--
                      Notwithstanding any other provision of this Act, a 
                      married couple, or 2 individuals who were 
                      previously a married couple, who are in default on 
                      a joint consolidation loan may be eligible to 
                      receive a separate Federal Direct Consolidation 
                      Loan under this part in accordance with this 
                      paragraph.
                    ``(B) Secretarial requirements.--Notwithstanding 
                section 428C(a)(3)(A) or any other provision of law, for 
                each individual borrower who applies under subparagraph 
                (A), the Secretary shall--
                          ``(i) make a separate Federal Direct 
                      Consolidation Loan under this part that--
                                    ``(I) shall be for an amount equal 
                                to the product of--
                                            ``(aa) the unpaid principal 
                                        and accrued unpaid interest of 
                                        the joint consolidation loan

[[Page 136 STAT. 2220]]

                                        (as of the date that is the day 
                                        before such separate 
                                        consolidation loan is made) and 
                                        any outstanding charges and fees 
                                        with respect to such loan; and
                                            ``(bb) the percentage of the 
                                        joint consolidation loan 
                                        attributable to the loans of the 
                                        individual borrower for whom 
                                        such separate consolidation loan 
                                        is being made, as determined--
                                                ``(AA) on the basis of 
                                            the loan obligations of such 
                                            borrower with respect to 
                                            such joint consolidation 
                                            loan (as of the date such 
                                            joint consolidation loan was 
                                            made); or
                                                ``(BB) in the case in 
                                            which both borrowers 
                                            request, on the basis of 
                                            proportions outlined in a 
                                            divorce decree, court order, 
                                            or settlement agreement; and
                                    ``(II) has the same rate of interest 
                                as the joint consolidation loan (as of 
                                the date that is the day before such 
                                separate consolidation loan is made); 
                                and
                          ``(ii) <<NOTE: Notification.>>  in a timely 
                      manner, notify each individual borrower that the 
                      joint consolidation loan had been repaid and of 
                      the terms and conditions of their new loans.
                    ``(C) Application for separate direct consolidation 
                loan.--
                          ``(i) Joint application.--Except as provided 
                      in clause (ii), to receive separate consolidation 
                      loans under this part, both individual borrowers 
                      in a married couple (or previously married couple) 
                      shall jointly apply under subparagraph (A).
                          ``(ii) Separate application.--An individual 
                      borrower in a married couple (or previously 
                      married couple) may apply for a separate 
                      consolidation loan under subparagraph (A) 
                      separately and without regard to whether or when 
                      the other individual borrower in the married 
                      couple (or previously married couple) applies 
                      under subparagraph (A), in a case in which--
                                    ``(I) the individual borrower 
                                certifies to the Secretary that such 
                                borrower--
                                            ``(aa) has experienced an 
                                        act of domestic violence (as 
                                        defined in section 40002 of the 
                                        Violence Against Women Act of 
                                        1994 (34 U.S.C. 12291) from the 
                                        other individual borrower;
                                            ``(bb) has experienced 
                                        economic abuse (as defined in 
                                        section 40002 of the Violence 
                                        Against Women Act of 1994 (34 
                                        U.S.C. 12291) from the other 
                                        individual borrower; or
                                            ``(cc) is unable to 
                                        reasonably reach or access the 
                                        loan information of the other 
                                        individual borrower; or
                                    ``(II) <<NOTE: Determination.>>  the 
                                Secretary determines that authorizing 
                                each individual borrower to apply 
                                separately under

[[Page 136 STAT. 2221]]

                                subparagraph (A) would be in the best 
                                fiscal interests of the Federal 
                                Government.
                          ``(iii) Remaining obligation from separate 
                      application.--In the case of an individual 
                      borrower who receives a separate consolidation 
                      loan due to the circumstances described in clause 
                      (ii), the other non-applying individual borrower 
                      shall become solely liable for the remaining 
                      balance of the joint consolidation loan.''.

    (b) Conforming Amendment.--Section 428C(a)(3)(B)(i)(V) of the Higher 
Education Act of 1965 (20 U.S.C. 1078-3(3)(B)(i)(V)) is amended--
            (1) by striking ``or'' at the end of item (bb);
            (2) by striking the period at the end of item (cc) and 
        inserting ``; or''; and
            (3) by adding at the end the following:
                                            ``(dd) for the purpose of 
                                        separating a joint consolidation 
                                        loan into 2 separate Federal 
                                        Direct Consolidation Loans under 
                                        section 455(g)(2).''.

    Approved October 11, 2022.

LEGISLATIVE HISTORY--S. 1098:
---------------------------------------------------------------------------

CONGRESSIONAL RECORD, Vol. 168 (2022):
            June 15, considered and passed Senate.
            Sept. 20, 21, considered and passed House.

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