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)]
<DOC>
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.''.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Education and Labor.
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