Title: Joint Consolidation Loan Separation Act
Policy area: Education

Summary:
Joint Consolidation Loan Separation Act
This bill allows two borrowers, who had previously received a joint consolidation loan for their student debt under the William D. Ford Federal Direct Loan Program, to submit a joint application to sever their consolidated loan. One borrower may submit a separate application in the event that the individual is experiencing domestic or economic abuse from the other individual borrower, or is unable to reasonably reach or access the loan information of the other borrower.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 1489 Introduced in Senate (IS)]

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116th CONGRESS
  1st Session
                                S. 1489

  To amend the Higher Education Act of 1965 to authorize borrowers to 
                  separate joint consolidation loans.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 15, 2019

  Mr. Warner (for himself, Mr. Rubio, and Mr. Cornyn) introduced the 
 following bill; which was read twice and referred to the Committee on 
                 Health, Education, Labor, and Pensions

_______________________________________________________________________

                                 A BILL


 
  To amend the Higher Education Act of 1965 to authorize borrowers to 
                  separate joint consolidation loans.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

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.--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 or before June 30, 
                2006), may apply to the Secretary for each individual 
                borrower in the married couple (or previously married 
                couple) to receive a separate Federal Direct 
                Consolidation Loan under this part--
                            ``(i) that shall be equal to the sum of--
                                    ``(I) the unpaid principal and 
                                accrued unpaid interest of the 
                                percentage of the joint consolidation 
                                loan that, as of the day before such 
                                joint consolidation loan was made, was 
                                attributable to the loans of the 
                                individual borrower for whom such 
                                separate consolidation loan is being 
                                made; and
                                    ``(II) any other loans described in 
                                section 428C(a)(4) that such individual 
                                borrower selects for consolidation 
                                under this part;
                            ``(ii) the proceeds of which shall be paid 
                        by the Secretary to the holder or holders--
                                    ``(I) of the joint consolidation 
                                loan for the purpose of discharging the 
                                liability on the percentage of such 
                                joint consolidation loan described in 
                                clause (i)(I); and
                                    ``(II) of the loans selected for 
                                consolidation under clause (i)(II) for 
                                the purpose of discharging the 
                                liability on such loans;
                            ``(iii) that has the same rate of interest 
                        as the joint consolidation loan;
                            ``(iv) for which any payment made under 
                        section 455(m)(1)(A) on the joint consolidation 
                        loan during a period in which the individual 
                        borrower for whom such separate consolidation 
                        loan is being made was employed in a public 
                        service job described in section 455(m)(1)(B) 
                        shall be treated as if such payment were made 
                        on such separate consolidation loan; and
                            ``(v) for which any payment made under an 
                        income contingent repayment plan or an income-
                        based repayment plan described in subparagraph 
                        (D) or (E) of section 455(d)(1), respectively, 
                        on the joint consolidation loan shall be 
                        treated as if such payment were made on such 
                        separate consolidation loan.
                    ``(B) Application for separate direct consolidation 
                loan.--
                            ``(i) Joint application.--Except as 
                        provided in clause (ii), to receive separate 
                        consolidation loans under subparagraph (A), 
                        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 has 
                                experienced from the other individual 
                                borrower--
                                            ``(aa) domestic violence 
                                        (as defined in section 40002(a) 
                                        of the Violence Against Women 
                                        Act of 1994 (42 U.S.C. 
                                        13925(a))); or
                                            ``(bb) economic abuse 
                                        (including behaviors that 
                                        control such borrower's ability 
                                        to acquire, use, and maintain 
                                        access to money, credit, or the 
                                        joint financial obligations of 
                                        both borrowers);
                                    ``(II) the individual borrower 
                                certifies, on a form approved by the 
                                Secretary, that such borrower is unable 
                                to reasonably reach or access the loan 
                                information of the other individual 
                                borrower; or
                                    ``(III) the Secretary determines 
                                that authorizing each individual 
                                borrower to apply separately under 
                                subparagraph (A) would be in the best 
                                fiscal interests of the Federal 
                                Government.
                    ``(C) Borrower eligibility.--Notwithstanding 
                section 428C(a)(3)(A), the Secretary shall award a 
                consolidation loan under this part to each borrower 
                who--
                            ``(i) applies for such loan under 
                        subparagraph (A); and
                            ``(ii) meets the requirements of 
                        subparagraphs (A) and (B).''.
    (b) Conforming Amendment.--Section 428C(a)(3)(B)(i)(V) of the 
Higher Education Act of 1965 (20 U.S.C. 1078-3(a)(3)(B)(i)(V)) is 
amended--
            (1) in item (bb), by striking ``or'' after the semicolon;
            (2) in item (cc), by striking the period 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).''.
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