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The program, which was closed in 2006, allowed couples to combine student debt balances.
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However, the law prohibits the separation of loans, and borrowers are locked out of the loan forgiveness program.
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Senator Mark Warner’s bill allowing the separation of these loans has just passed the Senate.
Student loan borrowers seeking to separate their debt from their current or former spouse are one step closer to the bailout.
After 13 years of operation, Congress closed its spouse’s joint integrated loan program in 2006. It was created to allow couples to combine student debt balances with the idea that monthly payments at one interest rate would be more affordable. However, the law prohibits the separation of those loans. This means that if the couple is divorced or if there is domestic violence, the borrower must continue to pay off the debt together.
That’s why Virginia Senator Mark Warner sponsored the 2021 Joint Integrated Loan Separation Act, which allows borrowers to segregate these spouse loans, and the bill passed the Senate on Wednesday and is now fully passed. Head to the Senate for.
“This is a big step for everyone suffering from these loans,” Warner wrote on Twitter.
Another problem that these borrowers face is that student loan forgiveness is forbidden. The Public Service Loan Forgiveness (PSLF) program exempts students from debt to civil servants such as teachers and non-profit workers after 10 years of eligible payments. To qualify, the borrower must have a federal direct loan. Therefore, even if a spouse loan civil servant meets the PSLF criteria, you cannot apply for it because you cannot split the loan directly into a loan.
“I understand that people need to repay their debt. I get that part,” said Russell Case, a spouse loan civil servant. Said insider. “But if the government promises civil servants debt forgiveness after 10 years and after the facts it turns out that our loan isn’t eligible, that’s my biggest problem.”
Ministry of Education PSLF exemptionAnything that allows past federal loan payments to be eligible for the program will expire on October 31st.
According to data provided by the Student Borrower Protection Center, only 776 borrowers with spouse loans are still paying back, but previously by Congressman David Price, sponsor of the House version of Warner’s bill. Said Insiders This type of debt can be “crippled”.
“My colleagues and I are pleased to reintroduce this common-sense bipartisan law, and that we can quickly move the bill towards its long-deferred bill. I hope, “he said.
Read the original article Business insider