Separating joint consolidation loans

(a)

In general

Section 455(g) of the Higher Education Act of 1965 (20 U.S.C. 1087e(g)) is amended—(1)by striking A borrower and inserting the following:

(1)

In general

A borrower

; and

(2)by adding at the end the following:

(2)

Separating joint consolidation loans

(A)

In general

A married couple, or 2 individuals who were previously a married couple, and who received a joint consolidation loan as such married couple under subparagraph (C) of section 428C(a)(3) (as such subparagraph was in effect on or before June 30, 2006), may apply to the Secretary for each individual borrower in the married couple (or previously married couple) to receive a separate Federal Direct Consolidation Loan under this part—(i)that shall be equal to the sum of—(I)the unpaid principal and accrued unpaid interest of the percentage of the joint consolidation loan that, as of the day before such joint consolidation loan was made, was attributable to the loans of the individual borrower for whom such separate consolidation loan is being made; and(II)any other loans described in section 428C(a)(4) that such individual borrower selects for consolidation under this part;(ii)the proceeds of which shall be paid by the Secretary to the holder or holders—(I)of the joint consolidation loan for the purpose of discharging the liability on the percentage of such joint consolidation loan described in clause (i)(I); and(II)of the loans selected for consolidation under clause (i)(II) for the purpose of discharging the liability on such loans;(iii)that has the same rate of interest as the joint consolidation loan;(iv)for which any payment made under section 455(m)(1)(A) on the joint consolidation loan during a period in which the individual borrower for whom such separate consolidation loan is being made was employed in a public service job described in section 455(m)(1)(B) shall be treated as if such payment were made on such separate consolidation loan; and(v)for which any payment made under an income contingent repayment plan or an income-based repayment plan described in subparagraph (D) or (E) of section 455(d)(1), respectively, on the joint consolidation loan shall be treated as if such payment were made on such separate consolidation loan.(B)

Application for separate direct consolidation loan

(i)

Joint application

Except as provided in clause (ii), to receive separate consolidation loans under subparagraph (A), both individual borrowers in a married couple (or previously married couple) shall jointly apply under subparagraph (A).(ii)

Separate application

An individual borrower in a married couple (or previously married couple) may apply for a separate consolidation loan under subparagraph (A) separately and without regard to whether or when the other individual borrower in the married couple (or previously married couple) applies under subparagraph (A), in a case in which—(I)the individual borrower has experienced from the other individual borrower—(aa)domestic violence (as defined in section 40002(a) of the Violence Against Women Act of 1994 (42 U.S.C. 13925(a))); or(bb)economic abuse (including behaviors that control such borrower’s ability to acquire, use, and maintain access to money, credit, or the joint financial obligations of both borrowers);(II)the individual borrower certifies, on a form approved by the Secretary, that such borrower is unable to reasonably reach or access the loan information of the other individual borrower; or(III)the Secretary determines that authorizing each individual borrower to apply separately under subparagraph (A) would be in the best fiscal interests of the Federal Government.(C)

Borrower eligibility

Notwithstanding section 428C(a)(3)(A), the Secretary shall award a consolidation loan under this part to each borrower who—(i)applies for such loan under subparagraph (A); and(ii)meets the requirements of subparagraphs (A) and (B).

(b)

Conforming amendment

Section 428C(a)(3)(B)(i)(V) of the Higher Education Act of 1965 (20 U.S.C. 1078–3(a)(3)(B)(i)(V)) is amended—(1)in item (bb), by striking or after the semicolon;(2)in item (cc), by striking the period and inserting ; or; and(3)by adding at the end the following:

(dd)for the purpose of separating a joint consolidation loan into 2 separate Federal Direct Consolidation Loans under section 455(g)(2).