Title: Simplified Joint Consolidation Separation Act
Policy area: Education

Summary:
Simplified Joint Consolidation Separation Act
This bill establishes a process for separation of joint consolidation loans.
Specifically, the bill allows the two borrowers of a joint consolidation loan for their federal student loan debt to jointly request that the Department of Education or loan holder separate their existing joint consolidated loan into two individual consolidation loans.
One borrower may request separation of the joint consolidation loan into two individual consolidation loans in the event that the individual has experienced domestic or economic abuse from the other individual borrower or is subject to a decree or agreement requiring the separation of such joint loans and obligations.

[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8909 Introduced in House (IH)]

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117th CONGRESS
  2d Session
                                H. R. 8909

  To establish a process for separating joint consolidation loans to 
                  ensure timely relief for borrowers.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 20, 2022

 Ms. Foxx (for herself, Mr. Wilson of South Carolina, Mr. Banks, Mrs. 
   Miller-Meeks, Mrs. Harshbarger, Mrs. Spartz, Mr. Sempolinski, Mr. 
   Johnson of South Dakota, Mr. Cline, Mr. Bost, Mr. Murphy of North 
 Carolina, Ms. Letlow, Mr. Issa, Mr. Cole, Mr. Moolenaar, Mrs. Flores, 
  Mr. Carter of Georgia, Mr. Keller, Mr. Westerman, and Mrs. McClain) 
 introduced the following bill; which was referred to the Committee on 
                          Education and Labor

_______________________________________________________________________

                                 A BILL


 
  To establish a process for separating joint consolidation loans to 
                  ensure timely relief for borrowers.

    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 ``Simplified Joint Consolidation 
Separation Act''.

SEC. 2. AUTHORIZATION OF GUIDANCE TO SEPARATE JOINT CONSOLIDATION 
              LOANS.

    Section 428C of the Higher Education Act of 1965 (20 U.S.C. 1078-3) 
is amended--
            (1) in subsection (a)(3)(B)(i)--
                    (A) by striking ``and'' at the end of subclause 
                (IV);
                    (B) by striking the period at the end of subclause 
                (V) and inserting ``; and''; and
                    (C) by adding at the end the following:
                                    ``(VI) separation of a joint 
                                consolidation loan into individual 
                                consolidation loans in accordance with 
                                subsection (g) shall not be considered 
                                receipt of a consolidation loan for 
                                purposes of this clause, and an 
                                individual's status as an eligible 
                                borrower shall not change solely as a 
                                result of such a separation.''; and
            (2) by adding at the end the following:
    ``(g) Secretary Guidance on Joint Consolidation Loans.--
            ``(1) In general.--
                    ``(A) Authorization.--Notwithstanding section 
                421(d), a married couple, or two individuals who were 
                previously married and received a joint consolidation 
                loan under subsection (a)(3)(C) (as such subsection was 
                in effect on June 30, 2006), may jointly request the 
                Secretary or holder, in accordance with paragraph (2), 
                to separate the existing joint consolidation loan into 
                two individual consolidation loans.
                    ``(B) Eligibility for borrowers in default.--A 
                married couple, or two individuals who were previously 
                a married couple, who received a joint consolidation 
                loan described in subparagraph (A) and are in default 
                on such joint consolidation loan may both be eligible 
                for separation of such joint consolidation loan into 
                two individual consolidation loans in accordance with 
                this subsection.
                    ``(C) Eligibility for individual requests.--
                            ``(i) Circumstances allowing for separate 
                        application.--An individual who is one of the 
                        parties who received a joint consolidation loan 
                        described in subparagraph (A) may, separately 
                        and without regard to whether or when the other 
                        individual borrower who received such joint 
                        consolidation loan applies under subparagraph 
                        (A), request separation of such joint 
                        consolidation loan into two individual 
                        consolidation loans in accordance with this 
                        subsection in a case in which the requesting 
                        individual borrower certifies to the Secretary 
                        that such borrower--
                                    ``(I) has experienced an act of 
                                domestic violence from the other 
                                individual borrower;
                                    ``(II) has experienced an act of 
                                economic abuse from the other 
                                individual borrower; or
                                    ``(III) is subject to a divorce 
                                decree, court order, or settlement 
                                agreement requiring the separation of 
                                joint loans and obligations.
                            ``(ii) Obligation from separate 
                        application.--In the case of a joint 
                        consolidation loan that is separated upon 
                        request of an individual borrower due to one or 
                        more circumstances described in clause (i), the 
                        other non-applying individual borrower shall be 
                        liable for the outstanding balance of the 
                        individual consolidation loan of such borrower 
                        in the same manner as if both borrowers of the 
                        joint consolidation loan had applied for such 
                        separation.
            ``(2) Secretarial and holder requirements.--Notwithstanding 
        subsection (a)(3)(A) or any other provision of law, the 
        Secretary or holder may separate the joint consolidation loan 
        for eligible borrowers who meet the eligibility requirements 
        specified in paragraph (1). The two separate individual 
        consolidation loans shall--
                    ``(A) be for an amount equal to the product of--
                            ``(i) the unpaid principal and accrued 
                        unpaid interest of the joint consolidation loan 
                        (as of the date that is the day before 
                        separation of the joint consolidation loan) and 
                        any outstanding charges and fees with respect 
                        to such loan; and
                            ``(ii) the percentage of the joint 
                        consolidation loan attributable to the loans of 
                        the individual borrower for whom such separate 
                        consolidation loan is being separated, as 
                        determined--
                                    ``(I) 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
                                    ``(II) in the case in which both 
                                borrowers request, on the basis of 
                                proportions requested by the borrowers, 
                                outlined in a divorce decree, court 
                                order, or settlement agreement;
                    ``(B) have the same rate of interest as the joint 
                consolidation loan (as of the date that is the day 
                before separation of the joint consolidation loan); and
                    ``(C) not be considered new loans, shall be deemed 
                to have been made on the date such joint consolidation 
                loan was made, and shall have the same terms and 
                conditions as other consolidation loans made under this 
                part on such date.''.
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