Biparty bill would save survivors of domestic violence from having to pay their ex’s student loan debts
the US Department of Education began providing joint consolidation loans to married couples in January 1993. The couples who took out the loans agreed to be jointly and severally liable for repayment, which later proved problematic in divorce cases.
Congress then eliminated the program in July 2006, but borrowers who had survived domestic violence were forced to pay their ex-partner’s portion of the loan in addition to their own.
In order to resolve the issue, Democratic Senators Mark Warner of Virginia and David Price of North Carolina introduced the Joint Consolidation Loan Separation Act, co-sponsored by Republican Senators Marco Rubio of Florida and John Cornyn of Texas.
the Joint Consolidation Loan Separation Act would amend the Higher Education Act of 1965, allowing survivors of domestic violence to part with their ex-partner’s existing student loans by submitting an application to the Department of Education that would split the joint consolidation loan into two federal direct loans distinct.
The unpaid loan and the accumulated unpaid interest balance would then be proportionately divided according to the percentages that each borrower initially contributed to the loan. The two new federal direct loans would have the same interest rates as the joint consolidation loan.
Each borrower would also have the option to transfer eligible payments made on the joint consolidation loan to income-based repayment programs and the civil service loan forgiveness program.
“Victims of domestic violence who flee their dangerous life situations should not find themselves burdened with their partner’s debt when they try to move forward with their lives. Sadly, this is the reality for some Americans who are stuck with it. joint consolidation loans, ”Warner said in a statement. “This common sense bill would help a vulnerable population that has been unfairly held responsible for the debt of their former partner, by giving them the opportunity to regain their financial independence.”
The bill is supported by organizations including the National Network to End Domestic Violence, the National Consumer Law Center, the North Carolina Coalition against Domestic Violence, and the Virginia Sexual and Domestic Violence Action Alliance.
The proposal comes as the Biden administration faces increasing pressure to write off up to $ 50,000 in student loan debt. Biden had previously pledged up to $ 10,000 in student debt cancellation during the election campaign.
On Tuesday, more than 415 organizations, including the American Civil Liberties Union, the American Psychological Association and the Consumer Federation of America, wrote a letter to Biden and Vice President Kamala Harris calling on the White House to use executive power “to immediately cancel federal student debt.”
“Before the start of the Covid-19 public health crisis, student debt was already a drag on the national economy, weighing most heavily on black and Latin communities, as well as women,” the organizations wrote . “The cancellation of the administrative debt will bring real progress on your priorities for racial equity, economic recovery and the Covid-19 relief campaign.”
A American Association of University Women 2020 Analysis found that nearly two-thirds of the country’s $ 1.54 trillion in student debt is held by women.
Biden reportedly asked Education Secretary Miguel Cardona to prepare a report on the president’s legal authority to write off $ 50,000 in student debt per borrower, though the report’s findings have yet to be made public.