Joint Consolidation Loan Separation Act

I 117TH CONGRESS 1ST SESSION H. R. 2460 To amend the Higher Education Act of 1965 to authorize borrowers to separate joint consolidation loans. IN THE HOUSE OF REPRESENTATIVES APRIL 13, 2021 Mr. PRICE of North Carolina (for himself, Mr. MURPHY of North Carolina, and Ms. STEVENS) introduced the following bill; which was referred to the Committee on Education and Labor 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 Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Joint Consolidation 4 Loan Separation Act’’. 5 SEC. 2. SEPARATING JOINT CONSOLIDATION LOANS. 6 (a) IN GENERAL.—Section 455(g) of the Higher 7 Education Act of 1965 (20 U.S.C. 1087e(g)) is amend- 8 ed— 9 VerDate Sep 11 2014 03:51 Jun 05, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2460.IH H2460 pbinns on DSKJLVW7X2PROD with BILLS 2 •HR 2460 IH (1) by striking ‘‘A borrower’’ and inserting the 1 following: 2 ‘‘(1) IN GENERAL.—A borrower’’; 3 (2) in the first sentence, insert ‘‘(other than a 4 Federal Direct Consolidation Loan separated from a 5 joint consolidation loan under paragraph (2) of this 6 subsection)’’ after ‘‘under this part’’; and 7 (3) by adding at the end the following: 8 ‘‘(2) SEPARATING JOINT CONSOLIDATION 9 LOANS.— 10 ‘‘(A) IN GENERAL.—A married couple, or 11 2 individuals who were previously a married 12 couple, and who received a joint consolidation 13 loan as such married couple under subpara- 14 graph (C) of section 428C(a)(3) (as such sub- 15 paragraph was in effect on June 30, 2006), 16 may apply to the Secretary, in accordance with 17 subparagraph (C) of this paragraph, for each 18 individual borrower in the married couple (or 19 previously married couple) to receive a separate 20 Federal Direct Consolidation Loan under this 21 part. 22 ‘‘(B) SECRETARIAL REQUIREMENTS.—Not- 23 withstanding section 428C(a)(3)(A) or any 24 other provision of law, for each individual bor- 25 VerDate Sep 11 2014 03:51 Jun 05, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2460.IH H2460 pbinns on DSKJLVW7X2PROD with BILLS 3 •HR 2460 IH rower who applies under subparagraph (A), the 1 Secretary shall— 2 ‘‘(i) award a separate Federal Direct 3 Consolidation Loan under this part that— 4 ‘‘(I) shall be for an amount equal 5 to the product of— 6 ‘‘(aa) the unpaid principal 7 and accrued unpaid interest of 8 the joint consolidation loan (as of 9 the date that is the day before 10 such separate consolidation loan 11 is made); and 12 ‘‘(bb) the percentage of the 13 joint consolidation loan attrib- 14 utable to the loans of the indi- 15 vidual borrower for whom such 16 separate consolidation loan is 17 being made, as determined on the 18 basis of the loan obligations of 19 such borrower with respect to 20 such joint consolidation loan (as 21 of the date such joint consolida- 22 tion loan was made); and 23 ‘‘(II) has the same rate of inter- 24 est as the joint consolidation loan (as 25 VerDate Sep 11 2014 03:51 Jun 05, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2460.IH H2460 pbinns on DSKJLVW7X2PROD with BILLS 4 •HR 2460 IH of the date that is the day before such 1 separate consolidation loan is made); 2 and 3 ‘‘(ii) in order to discharge such indi- 4 vidual borrower from any remaining obli- 5 gation with respect to the percentage of 6 the joint consolidation loan described in 7 clause (i)(I)(bb)— 8 ‘‘(I) cancel the outstanding bal- 9 ance of interest and principal due on 10 such percentage, in the case of such a 11 loan held by the Secretary; and 12 ‘‘(II) through the holder of the 13 loan, assume the obligation to repay 14 the outstanding balance of interest 15 and principal due on such percentage, 16 in the case of such a loan made, in- 17 sured, or guaranteed under part B; 18 ‘‘(iii) ensure that such individual bor- 19 rower shall not be held liable for the repay- 20 ment of the percentage of the joint consoli- 21 dation loan that is not described in clause 22 (i)(I)(bb); 23 ‘‘(iv) in a case in which a payment 24 was made under section 455(m)(1)(A) on 25 VerDate Sep 11 2014 03:51 Jun 05, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2460.IH H2460 pbinns on DSKJLVW7X2PROD with BILLS 5 •HR 2460 IH the joint consolidation loan during a period 1 in which the individual borrower for whom 2 such separate consolidation loan is being 3 made was employed in a public service job 4 described in section 455(m)(1)(B), treat 5 such payment as if such payment were 6 made on the separate consolidation loan; 7 and 8 ‘‘(v) in a case in which a payment was 9 made under an income contingent repay- 10 ment plan or an income-based repayment 11 plan described in subparagraph (D) or (E) 12 of section 455(d)(1), respectively, on the 13 joint consolidation loan, treat such pay- 14 ment as if such payment were made on 15 such separate consolidation loan. 16 ‘‘(C) APPLICATION FOR SEPARATE DIRECT 17 CONSOLIDATION LOAN.— 18 ‘‘(i) JOINT APPLICATION.—Except as 19 provided in clause (ii), to receive separate 20 consolidation loans under this part, both 21 individual borrowers in a married couple 22 (or previously married couple) shall jointly 23 apply under subparagraph (A). 24 VerDate Sep 11 2014 03:51 Jun 05, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2460.IH H2460 pbinns on DSKJLVW7X2PROD with BILLS 6 •HR 2460 IH ‘‘(ii) SEPARATE APPLICATION.—An 1 individual borrower in a married couple (or 2 previously married couple) may apply for a 3 separate consolidation loan under subpara- 4 graph (A) separately and without regard to 5 whether or when the other individual bor- 6 rower in the married couple (or previously 7 married couple) applies under subpara- 8 graph (A), in a case in which— 9 ‘‘(I) the individual borrower has 10 experienced from the other individual 11 borrower— 12 ‘‘(aa) domestic violence (as 13 defined in section 40002(a) of 14 the Violence Against Women Act 15 of 1994 (42 U.S.C. 13925(a))); 16 or 17 ‘‘(bb) economic abuse (in- 18 cluding behaviors that control 19 such borrower’s ability to ac- 20 quire, use, and maintain access 21 to money, credit, or the joint fi- 22 nancial obligations of both bor- 23 rowers); 24 VerDate Sep 11 2014 03:51 Jun 05, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2460.IH H2460 pbinns on DSKJLVW7X2PROD with BILLS 7 •HR 2460 IH ‘‘(II) the individual borrower cer- 1 tifies, on a form approved by the Sec- 2 retary, that such borrower is unable 3 to reasonably reach or access the loan 4 information of the other individual 5 borrower; or 6 ‘‘(III) the Secretary determines 7 that authorizing each individual bor- 8 rower to apply separately under sub- 9 paragraph (A) would be in the best 10 fiscal interests of the Federal Govern- 11 ment.’’. 12 (b) CONFORMING AMENDMENT.—Section 13 428C(a)(3)(B)(i)(V) of the Higher Education Act of 1965 14 (20 U.S.C. 1078–3(3)(B)(i)(V)) is amended— 15 (1) by striking ‘‘or’’ at the end of item (bb); 16 (2) by striking the period at the end of item 17 (cc) and inserting ‘‘; or’’; and 18 (3) by adding at the end the following: 19 ‘‘(dd) for the purpose of sep- 20 arating a joint consolidation loan 21 into 2 separate Federal Direct 22 Consolidation Loans under sec- 23 tion 455(g)(2), except that such 24 separated Federal Direct Consoli- 25 VerDate Sep 11 2014 03:51 Jun 05, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2460.IH H2460 pbinns on DSKJLVW7X2PROD with BILLS 8 •HR 2460 IH dation Loan may not consolidate 1 such loan with the loans de- 2 scribed in section 428C(a)(4).’’. 3 Æ VerDate Sep 11 2014 03:51 Jun 05, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6301 E:\BILLS\H2460.IH H2460 pbinns on DSKJLVW7X2PROD with BILLS