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 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 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 117th Congress]
[From the U.S. Government Publishing Office]
[S. 1098 Introduced in Senate (IS)]

<DOC>






117th CONGRESS
  1st Session
                                S. 1098

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


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 13, 2021

  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'';
            (2) in the first sentence, insert ``(other than a Federal 
        Direct Consolidation Loan separated from a joint consolidation 
        loan under paragraph (2) of this subsection)'' after ``under 
        this part''; and
            (3) 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 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.
                    ``(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) award 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 
                                        (as of the date that is the day 
                                        before such separate 
                                        consolidation loan is made); 
                                        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 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); 
                                        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) in order to discharge such 
                        individual borrower from any remaining 
                        obligation with respect to the percentage of 
                        the joint consolidation loan described in 
                        clause (i)(I)(bb)--
                                    ``(I) cancel the outstanding 
                                balance of interest and principal due 
                                on such percentage, in the case of such 
                                a loan held by the Secretary; and
                                    ``(II) through the holder of the 
                                loan, assume the obligation to repay 
                                the outstanding balance of interest and 
                                principal due on such percentage, in 
                                the case of such a loan made, insured, 
                                or guaranteed under part B;
                            ``(iii) ensure that such individual 
                        borrower shall not be held liable for the 
                        repayment of the percentage of the joint 
                        consolidation loan that is not described in 
                        clause (i)(I)(bb);
                            ``(iv) in a case in which a payment was 
                        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), treat such payment as if such 
                        payment were made on the separate consolidation 
                        loan; and
                            ``(v) in a case in which a payment was 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, 
                        treat such payment as if such payment were made 
                        on such separate consolidation loan.
                    ``(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 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.''.
    (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), except that 
                                        such separated Federal Direct 
                                        Consolidation Loan may not 
                                        consolidate such loan with the 
                                        loans described in section 
                                        428C(a)(4).''.
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