Decades ago, couples were told that combining student loans was the best option for them.
But the law makes it impossible to separate loans. That is, otherwise qualified persons will not be able to enroll in the forgiveness program.
Insiders have spoken to spouse loan borrowers who see the new law as the only way to get out of debt.
Russell and Kate Case were told that integrating student loans was the best option for them.
This practice allows couples to combine student debt into one loan and pay one interest rate once a month. The idea is that it’s a more affordable option.
But there is a big problem. In doing so, they were forbidden to be exempt from debt under programs for civil servants like themselves. Currently, Russell and Kate, 52 and 51, respectively, jointly hold a $ 330,000 student and debt balance from a pair of graduate degrees.
Their income is sufficient to support themselves and their families, but public service jobs are generally not expensive and monthly student loan invoices are reduced to spending on other basic necessities. increase.
“I understand that people need to repay their debt. I get that part,” Russell told insiders. “But if the government promised civil servants debt forgiveness 10 years later and after the facts turned out that our loan wasn’t eligible, that’s my biggest problem.”
Congress closed the spouse joint integrated loan program in 2006, 13 years later. When the Civil Service Loan Exemption (PSLF) program (exempting civil servant students from debt after 10 years of eligible payments) was created in 2007, civil servants with spouse loans will have them from their relief. I didn’t know that I would be locked out.
To qualify for PSLF, a loan Linking For a federal direct loan. However, the law prohibits the separation of spouse loans, which is the first step in applying for a program. That is, unless a new bill is passed, these people will not be able to give relief to people who have the same financial profile but are not disturbed by their spouse loan. ..
It’s clear that consolidating loans wasn’t the best option for Russell and Kate, and since then they have refinanced some of their debt to low-interest private loans. However, they said they hope that people like them will be noticed by lawmakers and lead to legislative changes.
“It’s nice to meet people on the same boat as us, because you’re not like you’re alone on the island,” Russell said. “That incompatible toy island. Everyone wants to get excited because they think something will change. Then it doesn’t change and the rug is pulled out. Then it’s a bit similar. Why try it. “
“We’re okay, but we’ll be in debt forever.”
Rebecca Leroy, 47, is in a similar situation to Russell and Kate. She now has a $ 47,000 student debt from her spouse integration in 2003. Leroy has been working for a nonprofit organization in Washington for over 10 years, and her husband has been around for nearly 20 years. I’m doing that. Not only is she not eligible for PSLF, she is also considering taking out her parent’s PLUS loan after her child goes to college. Currently, her monthly payment of $ 460 is already a financial burden.
“I called the loan company several times to talk about PSLF, but I managed to get to the top of the chain before I was finally told to stop applying, Le Roy told Insider.
LeRoy, like Cases, does not live beyond her means. She simply cannot properly handle her debt burden with her current salary.
Of the 26,526 unique consolidated spouse loans there, 776 borrowers are still paying back, according to data acquired by the Student Borrower Protection Center and provided to Insider.Given that they are only a small part of the 45 million student loan borrowers out there, those who bear the burden of spouse loans, like any other larger one, the government will reach out to them. Claims that it should be easy to lend Group of borrowers..
“We’re okay, but we’re in debt forever,” Leroy said. “This group represents only a small part of what they have already forgiven to others, so it shouldn’t take too much to give us all some relief.”
The only solution is to use the law
Some lawmakers are aware of the spouse loan challenge not only with respect to PSLF, but also with the inability to separate the loan in the event of divorce or domestic violence.
As a result, Virginia Senator Mark Warner and North Carolina Parliamentarian David Price Introduced The 2021 Joint Integrated Loan Separation Act. This allows the borrower to apply to split the loan into two separate loans.
“The Co-Integrated Loan Separation Act was created in direct response to my experience of damaging co-integrated loans,” Price told insiders.
“Unfortunately, borrowers across the country are responsible for the potentially abusive or non-communicative former partner portion of their consolidated debt,” he added. “This debt can be devastating if there is no legal option for relief, as in the case of my members. My colleagues and I have this common-sense bipartisan. We are pleased to reintroduce the law.-Passing overdue to the law. “
There is a bit of time constraints to pass this bill — recently the Ministry of Education. publication With the PSLF exemption running until October 31, past payments will be counted as forgiveness. If you have a spouse loan, you want to be able to split the loan in time to access the exemption and get relief.
“If we could separate the loan by divorce, we would definitely get divorced and then remarried,” Kate Case said. “In essence, you are a married couple, so it is strange to think that you are being punished now.”
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