117 HR 8909 IH: Simplified Joint Consolidation Separation Act
U.S. House of Representatives
2022-09-20
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I
117th CONGRESS
2d Session
H. R. 8909
IN THE HOUSE OF REPRESENTATIVES
September 20, 2022
Ms. Foxx (for herself, Mr. Wilson of South Carolina, Mr. Banks, Mrs. Miller-Meeks, Mrs. Harshbarger, Mrs. Spartz, Mr. Sempolinski, Mr. Johnson of South Dakota, Mr. Cline, Mr. Bost, Mr. Murphy of North Carolina, Ms. Letlow, Mr. Issa, Mr. Cole, Mr. Moolenaar, Mrs. Flores, Mr. Carter of Georgia, Mr. Keller, Mr. Westerman, and Mrs. McClain) introduced the following bill; which was referred to the Committee on Education and Labor
A BILL
To establish a process for separating joint consolidation loans to ensure timely relief for borrowers.
1.

Short title
This Act may be cited as the “Simplified Joint Consolidation Separation Act”.
2.

Authorization of guidance to separate joint consolidation loans
Section 428C of the Higher Education Act of 1965 (20 U.S.C. 1078–3) is amended—
(1)
in subsection (a)(3)(B)(i)—
(A)
by striking “and” at the end of subclause (IV);
(B)
by striking the period at the end of subclause (V) and inserting “; and”; and
(C)
by adding at the end the following:
“(VI)
separation of a joint consolidation loan into individual consolidation loans in accordance with subsection (g) shall not be considered receipt of a consolidation loan for purposes of this clause, and an individual’s status as an eligible borrower shall not change solely as a result of such a separation.”; and
(2)
by adding at the end the following:
“(g)

Secretary guidance on joint consolidation loans
(1)

In general
(A)

Authorization
Notwithstanding section 421(d), a married couple, or two individuals who were previously married and received a joint consolidation loan under subsection (a)(3)(C) (as such subsection was in effect on June 30, 2006), may jointly request the Secretary or holder, in accordance with paragraph (2), to separate the existing joint consolidation loan into two individual consolidation loans.
(B)

Eligibility for borrowers in default
A married couple, or two individuals who were previously a married couple, who received a joint consolidation loan described in subparagraph (A) and are in default on such joint consolidation loan may both be eligible for separation of such joint consolidation loan into two individual consolidation loans in accordance with this subsection.
(C)

Eligibility for individual requests
(i)

Circumstances allowing for separate application
An individual who is one of the parties who received a joint consolidation loan described in subparagraph (A) may, separately and without regard to whether or when the other individual borrower who received such joint consolidation loan applies under subparagraph (A), request separation of such joint consolidation loan into two individual consolidation loans in accordance with this subsection in a case in which the requesting individual borrower certifies to the Secretary that such borrower—
(I)
has experienced an act of domestic violence from the other individual borrower;
(II)
has experienced an act of economic abuse from the other individual borrower; or
(III)
is subject to a divorce decree, court order, or settlement agreement requiring the separation of joint loans and obligations.
(ii)

Obligation from separate application
In the case of a joint consolidation loan that is separated upon request of an individual borrower due to one or more circumstances described in clause (i), the other non-applying individual borrower shall be liable for the outstanding balance of the individual consolidation loan of such borrower in the same manner as if both borrowers of the joint consolidation loan had applied for such separation.
(2)

Secretarial and holder requirements
Notwithstanding subsection (a)(3)(A) or any other provision of law, the Secretary or holder may separate the joint consolidation loan for eligible borrowers who meet the eligibility requirements specified in paragraph (1). The two separate individual consolidation loans shall—
(A)
be for an amount equal to the product of—
(i)
the unpaid principal and accrued unpaid interest of the joint consolidation loan (as of the date that is the day before separation of the joint consolidation loan) and any outstanding charges and fees with respect to such loan; and
(ii)
the percentage of the joint consolidation loan attributable to the loans of the individual borrower for whom such separate consolidation loan is being separated, as determined—
(I)
on the basis of the loan obligations of such borrower with respect to such joint consolidation loan (as of the date such joint consolidation loan was made); or
(II)
in the case in which both borrowers request, on the basis of proportions requested by the borrowers, outlined in a divorce decree, court order, or settlement agreement;
(B)
have the same rate of interest as the joint consolidation loan (as of the date that is the day before separation of the joint consolidation loan); and
(C)
not be considered new loans, shall be deemed to have been made on the date such joint consolidation loan was made, and shall have the same terms and conditions as other consolidation loans made under this part on such date.”.