Joint Consolidation Loan Separation Act

II 116TH CONGRESS 1ST SESSION S. 1489 To amend the Higher Education Act of 1965 to authorize borrowers to separate joint consolidation loans. IN THE SENATE OF THE UNITED STATES MAY 15, 2019 Mr. WARNER (for himself, Mr. RUBIO, and Mr. CORNYN) introduced the fol- lowing bill; which was read twice and referred to the Committee on Health, Education, Labor, and Pensions 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 02:25 May 25, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1489.IS S1489 kjohnson on DSK79L0C42 with BILLS 2 •S 1489 IS (1) by striking ‘‘A borrower’’ and inserting the 1 following: 2 ‘‘(1) IN GENERAL.—A borrower’’; and 3 (2) by adding at the end the following: 4 ‘‘(2) SEPARATING JOINT CONSOLIDATION 5 LOANS.— 6 ‘‘(A) IN GENERAL.—A married couple, or 7 2 individuals who were previously a married 8 couple, and who received a joint consolidation 9 loan as such married couple under subpara- 10 graph (C) of section 428C(a)(3) (as such sub- 11 paragraph was in effect on or before June 30, 12 2006), may apply to the Secretary for each in- 13 dividual borrower in the married couple (or pre- 14 viously married couple) to receive a separate 15 Federal Direct Consolidation Loan under this 16 part— 17 ‘‘(i) that shall be equal to the sum 18 of— 19 ‘‘(I) the unpaid principal and ac- 20 crued unpaid interest of the percent- 21 age of the joint consolidation loan 22 that, as of the day before such joint 23 consolidation loan was made, was at- 24 tributable to the loans of the indi- 25 VerDate Sep 11 2014 02:25 May 25, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1489.IS S1489 kjohnson on DSK79L0C42 with BILLS 3 •S 1489 IS vidual borrower for whom such sepa- 1 rate consolidation loan is being made; 2 and 3 ‘‘(II) any other loans described in 4 section 428C(a)(4) that such indi- 5 vidual borrower selects for consolida- 6 tion under this part; 7 ‘‘(ii) the proceeds of which shall be 8 paid by the Secretary to the holder or 9 holders— 10 ‘‘(I) of the joint consolidation 11 loan for the purpose of discharging 12 the liability on the percentage of such 13 joint consolidation loan described in 14 clause (i)(I); and 15 ‘‘(II) of the loans selected for 16 consolidation under clause (i)(II) for 17 the purpose of discharging the liability 18 on such loans; 19 ‘‘(iii) that has the same rate of inter- 20 est as the joint consolidation loan; 21 ‘‘(iv) for which any payment made 22 under section 455(m)(1)(A) on the joint 23 consolidation loan during a period in which 24 the individual borrower for whom such sep- 25 VerDate Sep 11 2014 02:25 May 25, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1489.IS S1489 kjohnson on DSK79L0C42 with BILLS 4 •S 1489 IS arate consolidation loan is being made was 1 employed in a public service job described 2 in section 455(m)(1)(B) shall be treated as 3 if such payment were made on such sepa- 4 rate consolidation loan; and 5 ‘‘(v) for which any payment made 6 under an income contingent repayment 7 plan or an income-based repayment plan 8 described in subparagraph (D) or (E) of 9 section 455(d)(1), respectively, on the joint 10 consolidation loan shall be treated as if 11 such payment were made on such separate 12 consolidation loan. 13 ‘‘(B) APPLICATION FOR SEPARATE DIRECT 14 CONSOLIDATION LOAN.— 15 ‘‘(i) JOINT APPLICATION.—Except as 16 provided in clause (ii), to receive separate 17 consolidation loans under subparagraph 18 (A), both individual borrowers in a married 19 couple (or previously married couple) shall 20 jointly apply under subparagraph (A). 21 ‘‘(ii) SEPARATE APPLICATION.—An 22 individual borrower in a married couple (or 23 previously married couple) may apply for a 24 separate consolidation loan under subpara- 25 VerDate Sep 11 2014 02:25 May 25, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1489.IS S1489 kjohnson on DSK79L0C42 with BILLS 5 •S 1489 IS graph (A) separately and without regard to 1 whether or when the other individual bor- 2 rower in the married couple (or previously 3 married couple) applies under subpara- 4 graph (A), in a case in which— 5 ‘‘(I) the individual borrower has 6 experienced from the other individual 7 borrower— 8 ‘‘(aa) domestic violence (as 9 defined in section 40002(a) of 10 the Violence Against Women Act 11 of 1994 (42 U.S.C. 13925(a))); 12 or 13 ‘‘(bb) economic abuse (in- 14 cluding behaviors that control 15 such borrower’s ability to ac- 16 quire, use, and maintain access 17 to money, credit, or the joint fi- 18 nancial obligations of both bor- 19 rowers); 20 ‘‘(II) the individual borrower cer- 21 tifies, on a form approved by the Sec- 22 retary, that such borrower is unable 23 to reasonably reach or access the loan 24 VerDate Sep 11 2014 02:25 May 25, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1489.IS S1489 kjohnson on DSK79L0C42 with BILLS 6 •S 1489 IS information of the other individual 1 borrower; or 2 ‘‘(III) the Secretary determines 3 that authorizing each individual bor- 4 rower to apply separately under sub- 5 paragraph (A) would be in the best 6 fiscal interests of the Federal Govern- 7 ment. 8 ‘‘(C) BORROWER ELIGIBILITY.—Notwith- 9 standing section 428C(a)(3)(A), the Secretary 10 shall award a consolidation loan under this part 11 to each borrower who— 12 ‘‘(i) applies for such loan under sub- 13 paragraph (A); and 14 ‘‘(ii) meets the requirements of sub- 15 paragraphs (A) and (B).’’. 16 (b) CONFORMING AMENDMENT.—Section 17 428C(a)(3)(B)(i)(V) of the Higher Education Act of 1965 18 (20 U.S.C. 1078–3(a)(3)(B)(i)(V)) is amended— 19 (1) in item (bb), by striking ‘‘or’’ after the 20 semicolon; 21 (2) in item (cc), by striking the period and in- 22 serting ‘‘; or’’; and 23 (3) by adding at the end the following: 24 VerDate Sep 11 2014 02:25 May 25, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S1489.IS S1489 kjohnson on DSK79L0C42 with BILLS 7 •S 1489 IS ‘‘(dd) for the purpose of sep- 1 arating a joint consolidation loan 2 into 2 separate Federal Direct 3 Consolidation Loans under sec- 4 tion 455(g)(2).’’. 5 Æ VerDate Sep 11 2014 02:25 May 25, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6301 E:\BILLS\S1489.IS S1489 kjohnson on DSK79L0C42 with BILLS