House to Vote on Student Loan Bill That Allows Loan Modifications
WASHINGTON — The U.S. House of Representatives is scheduled to vote Wednesday on a bill that would allow married couples with consolidated student debt to pay down their loans separately.
The Joint Consolidation Loan Separation Act is part of a broader Biden administration plan to reduce college debt that can follow borrowers for decades after graduation, hurting their ability to build wealth.
Until 2006, federal law allowed married couples to combine their student loan balances into one monthly payment with a goal of making the debt more affordable. More than 14,700 people consolidated their debt under the program, according to the Student Borrower Protection Center.
A problem with the program was that each borrower remained liable for the debt of the other partner, even if the marriage degraded into an abusive relationship or ended in divorce. It left the spouses with no way to get out of the joint debt.
The program started in 1993 but Congress ended it in 2006. The consolidated debt continues for thousands of the borrowers.
The proposed legislation would allow borrowers to apply to the Department of Education to sever their consolidated loan into separate loans.
The Senate approved the proposal in June, overcoming concerns by some Republicans that it gave the Education Department too much discretion in modifying contracts for loan repayments.
The House Rules Committee held a hearing on the bill Monday to discuss any remaining concerns before the vote.
“It’s time we do something about it,” said Rep. James McGovern, D-Mass., chairman of the House Rules Committee.
In some cases, one deadbeat spouse might take advantage of another by forcing them to pay off their debt, which was never the intent of the original program, McGovern and other lawmakers said. Other spouses lose their desire to help their partners pay off their debt amid physical or mental abuse.
“Victims of domestic violence or economic abuse should never have to pay the debts of their abuser,” McGovern said.
Republicans agreed with the intent of the bill but said what they called “vague” language could thwart its purpose.
Rep. Virginia Foxx, R-N.C., said the bill uses ill-defined standards to determine how the student debt should be separated between joint borrowers.
“In some cases, this could leave the abused spouse with an economic burden that does not belong to that person,” Foxx said.
If there is doubt about whether to grant an application for separate loans and how the debt should be allocated, the Department of Education has few restrictions on making the final decision, she said.
“It fails to protect taxpayers,” Foxx said.
Despite the Republican concerns, Democrats prevailed in marking up the Joint Consolidation Loan Separation Act for a final vote.
“This bill does not solve the student debt crisis, it takes another step,” said Rep. Bobby Scott, D-Va.
A bigger step was taken last month when President Joe Biden announced the federal government would cancel $10,000 in student debt for borrowers who earned less than $125,000 a year. The executive order is eliminating or reducing the debt for an estimated 43 million Americans.
It also made Republicans warn the debt cancellation would contribute to inflation.
Tom can be reached at firstname.lastname@example.org or on Twitter at @tramstack.
In The News
WASHINGTON — Two Democrats from a House committee on Friday alleged a suspicious conflict of interest in a pardon former... Read More
WASHINGTON — Two Democrats from a House committee on Friday alleged a suspicious conflict of interest in a pardon former President Donald Trump granted two convicted arsonists. In a letter they sent to Interior Secretary Deb Haaland, they say a donation to Trump’s political campaign days... Read More
WASHINGTON — The New Democrat Coalition has elected Rep. Annie Kuster, D-N.H., to serve as its chair in the 118th... Read More
WASHINGTON — The New Democrat Coalition has elected Rep. Annie Kuster, D-N.H., to serve as its chair in the 118th Congress. Reps. Sharice Davids, D-Kan., Brad Schneider, D-Ill., Derek Kilmer, D-Wash., and Salud Carbajal, D-Calif., were elected to be the next vice chairs. Current Chair Suzan... Read More
WASHINGTON — Rep. Steven Horsford, D-Nev., has been elected to be the next chair of the Congressional Black Caucus. Horsford... Read More
WASHINGTON — Rep. Steven Horsford, D-Nev., has been elected to be the next chair of the Congressional Black Caucus. Horsford has represented Nevada’s 4th Congressional District since 2019, and previously held the position from 2013 to 2015. Prior to coming to Washington, Horsford served in the... Read More
WASHINGTON — The House passed legislation Wednesday to avert a nationwide rail strike, the first step in avoiding an economic... Read More
WASHINGTON — The House passed legislation Wednesday to avert a nationwide rail strike, the first step in avoiding an economic calamity at the height of the holiday shopping season. The chamber passed the main resolution in a 290-137 vote, sending it to the Senate for consideration... Read More
WASHINGTON — Sixty-one years after President John F. Kennedy famously declared during his inaugural address that “the torch has been... Read More
WASHINGTON — Sixty-one years after President John F. Kennedy famously declared during his inaugural address that “the torch has been passed” to a new generation, that process was renewed again on Capitol Hill on Wednesday, as House Democrats unanimously elected Rep. Hakeem Jeffries, D-N.Y., to lead... Read More
WASHINGTON – The Senate passed a bill to codify federal recognition of same-sex marriage on Tuesday night, adding religious liberty... Read More
WASHINGTON – The Senate passed a bill to codify federal recognition of same-sex marriage on Tuesday night, adding religious liberty protections to ensure its bipartisan support. The 61-36 vote in the chamber now sends the measure to the House, where Majority Leader Steny Hoyer, D-Md., predicted... Read More