Comments on: Congress Passes Legislation to Separate Spousal Joint Consolidation Student Loans

By: Michael P. Lux, Esq.

Michael P. Lux, Esq. — Thu, 03 Aug 2023 01:01:03 +0000

In reply to Shawn. I'm surprised your servicer told you that. It's certainly possible that your loans could be split 50/50, but that is not the default rule. The standard rule is that the split is based on the loan balances pre-consolidation. Studentaid.gov released an update on the process and confirmed this fact. Sadly, the recent update also indicated that the joint consolidation split process would not be available until late 2024.

By: Shawn

Shawn — Thu, 03 Aug 2023 00:53:10 +0000

How do my ex-wife and I apply for this? It’s now almost a year later, 8/2/23. When I called Navient and the lady told me about this, she told me the loans would be split 50/50 regardless of the initial consolidation balances. Is this not accurate?

By: Michael P. Lux, Esq.

Michael P. Lux, Esq. — Tue, 10 Jan 2023 15:07:50 +0000

In reply to Knot. Unfortunately, there are no updates to report yet. The bill passed, so the application is definitely coming, but the Department of Education is moving very slowly these days, so we have no idea when it will happen.

By: Knot

Knot — Mon, 09 Jan 2023 10:53:30 +0000

Any update on the application release? I somehow got into this some 20 years ago when I had maybe $7000 to my ex’s $150,000+. Loan forgiveness was always the goal so I have no idea how we got into this. Per our divorce, he was to get me off of these loans “in a timely manner”. Years, on top of my efforts to push this legislation, and he still won’t do it. He holds this over me for reasons unknown and has every excuse not to file. I need help. This attachment is killing my credit let alone messes with my head! This is not my debt!

By: Michael P. Lux, Esq.

Michael P. Lux, Esq. — Mon, 28 Nov 2022 20:39:18 +0000

In reply to Patsy Jo. Unfortunately, I have no idea when it will be released. This is the sort of thing they will just announce once it is ready. I'll update this article once it becomes available.

By: Patsy Jo

Patsy Jo — Sat, 26 Nov 2022 22:10:41 +0000

I also made the mistake of consolidating loans, even though my parents paid for almost all of my education. Now I am 46 years old, divorced from the man I consolidated with and still paying on the loans… best of all, I work for a non profit!!! Every time I try to qualify for any forgiveness, I get denied because of the consolidation. I only borrowed less than $2000 and still owe $23, 000 due to the consolidation. I just want to be done with them. When will with application be available?

By: Michael P. Lux, Esq.

Michael P. Lux, Esq. — Thu, 10 Nov 2022 15:29:25 +0000

In reply to Alan Lipps.

You definitely got a raw deal, Alan. Based on the information that was available at the time you did the joint consolidation, it was a justifiable choice. Over the years, changes to the rules penalized you more and more.

This is one of those cases where writing to your elected representatives can make a difference. I’d also suggest filing a complaint with the Department of Education too. I’ve found that many elected leaders don’t really understand the intricacies of the student loan system. When a constituent highlights an issue, it can lead to a fix.

By: Alan Lipps

Alan Lipps — Wed, 09 Nov 2022 23:04:23 +0000

I thought I was making a wise decision when I consolidated my wife and my student loans. Why does it now seem that we get punished for that decision? We have worked for educational institutions and would have qualified for PSLF had we not consolidated our loans. Now, I may be finally able to separate them, but none of the 15 years worth of payments I made will count toward the 10 years of qualifying payments. Who can I write to to complain? I want to make noise about this. This is unfair.

By: Michael P. Lux, Esq.

Michael P. Lux, Esq. — Sat, 29 Oct 2022 15:44:16 +0000

In reply to Phil Hinz.

That doesn’t sound right. It sounds like there is some mixed information about a couple of different programs happening.

Let me try to untangle things for you.

First, all spousal consolidation loans are not necessarily FFEL loans. Some of them are direct loans, some of them are FFEL loans. What did happen in 2010 is that the program was discontinued, and the headaches for borrowers with these loans really started.

As for the Joint Consolidation Loan Seperation Act, the bill was just signed. It has not been implemented yet. At this point, servicers are still waiting for directions from the Department of Education. With everything happening right now with student loans, it may be a bit of time before the separation opportunities start.

(Side Note: the idea that all spousal loans are FFEL and the joint consolidation act doesn’t apply to FFEL loans doesn’t make sense. Why would they pass a bill that applies to zero borrowers?)

Finally, I think part of the information you are getting is details about the one-time Biden Forgiveness program. This is the $10,000 or $20,000 of forgiveness that has been in the news. Spousal loans currently do not benefit. Likewise, FFEL loans do not currently benefit. (I’m hopeful that both things eventually change.)

By: Phil Hinz

Phil Hinz — Fri, 28 Oct 2022 21:12:29 +0000

Nelnet says I am not able to consolidate into the Federal Direct Consolidation Loan, because in July 2010 the Spousal Consolidated loans ALL became “commercially-held” FFEL loans. Is this true? The Nelnet person said that mine are now “commercially-held” FFELP loans and would not be helped by the Joint Consolidation Loan Separation Act – only the Fed held ones can get relief. Is this true? I don’t have any idea why they think the loan is commercially-held, I never went to a bank.