Congress fixes student loan forgiveness for some divorced couples, sending it to Biden’s desk.

Until 2006, married couples were allowed to consolidate their federal studentship in a single loan for a loan debt. The idea was that it could make repayment easier by allowing the couple to make just one monthly payment.

But he also made the couple responsible for the debt, and the couple has no way to separate the student. loans later, even in case of divorce or domestic abuse.

“Spousal settlement loans have been a huge burden for borrowers who have since divorced or experienced domestic abuse, as these loans handcuff their ex-spouses or abusers financially,” said Kyra Taylor, student loan attorney at the National Consumer Law Center. , in a statement.

Consolidated couple loans are excluded from some federal student loans, such as the Public Service Loan Forgiveness program, which allows some public sector employees to pay off balances after 10 years of payments.

Consolidation loans are also ineligible for the amnesty Biden announced in August, which will provide up to $10,000. debt relief for individuals earning less than $125,000 a year and married couples or heads of household earning less than $250,000 a year. Borrowers who also received a Pell Grant while enrolled in college can receive up to $20,000 in student loan forgiveness.

The bill passed Wednesday would allow borrowers with a single consolidation loan to file jointly with the Department of Education to split the debt into two separate loans. The loans would be distributed proportionally based on the amount of the original loan, according to a statement from the White House in support of the bill.

The bill allows survivors of domestic violence or financial abuse, or lenders who cannot reach the other borrower, to submit an individual application.

After the debt is separated, each borrower will have a Direct Consolidation Loan and can receive student loan forgiveness under Biden’s new plan, as long as the borrower meets the income qualification and the underlying loans were disbursed in June or earlier. 30 of 2022 — According to the Department of Education.

The Biden administration’s request for student loan forgiveness is expected to be released in early October. Borrowers have until December 31, 2023 to apply.