Bill Overview
Title: Simplified Joint Consolidation Separation Act
Description: This bill establishes a process for separation of joint consolidation loans. Specifically, the bill allows the two borrowers of a joint consolidation loan for their federal student loan debt to jointly request that the Department of Education or loan holder separate their existing joint consolidated loan into two individual consolidation loans. One borrower may request separation of the joint consolidation loan into two individual consolidation loans in the event that the individual has experienced domestic or economic abuse from the other individual borrower or is subject to a decree or agreement requiring the separation of such joint loans and obligations.
Sponsors: Rep. Foxx, Virginia [R-NC-5]
Target Audience
Population: Individuals with joint federal student loans seeking separation
Estimated Size: 200000
- The bill targets individuals who have joint federal student loans.
- The bill primarily impacts those who are seeking to separate their joint consolidation loans into individual loans.
- It specifically affects borrowers who have experienced domestic or economic abuse, or are under a legal decree requiring loan separation.
- Joint consolidation loans for federal student debt were available between 1993 and 2006 in the US.
Reasoning
- The policy is focused on providing flexibility to individuals who jointly hold federal student loans, particularly those who might be in difficult personal circumstances such as domestic or economic abuse.
- The estimated 200,000 target individuals over 10 years is small relative to the entire population of federal student loan borrowers, meaning that a variety of circumstances would exist in this small group.
- Given the focused nature of the policy (targeting joint loans which were only issued between 1993 and 2006), the impact will likely be uneven across the population.
- Some individuals will benefit greatly from the policy due to relief from financial ties to abusive partners, whereas others might remain unaffected if they neither need nor desire loan separation.
- Considering the budgeting restrictions, it is likely that the program cannot address every loan separation case in the first year, and prioritize will likely be given based on urgency or severity, such as cases involving abuse.
Simulated Interviews
Marketing Manager (Austin, TX)
Age: 45 | Gender: female
Wellbeing Before Policy: 4
Duration of Impact: 20.0 years
Commonness: 3/20
Statement of Opinion:
- This policy could finally separate my financial life from my ex, which has been a nightmare.
- The option to separate under conditions like mine is crucial, especially when dealing with abuse.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 6 | 4 |
| Year 3 | 6 | 4 |
| Year 5 | 7 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 8 | 6 |
Software Developer (Seattle, WA)
Age: 38 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 5/20
Statement of Opinion:
- Separating these loans makes sense, simplifies our financial situation without animosity involved.
- I'm concerned about how quickly this process could be made available to us.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 8 | 7 |
| Year 20 | 9 | 8 |
Freelance Artist (New York, NY)
Age: 27 | Gender: other
Wellbeing Before Policy: 7
Duration of Impact: 1.0 years
Commonness: 10/20
Statement of Opinion:
- I think it's good that there's an option if anything ever happened, though I currently have no need for it.
- Planning with more peace of mind is valuable.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 8 |
Retired (Cleveland, OH)
Age: 50 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 0.0 years
Commonness: 2/20
Statement of Opinion:
- I'm glad this option exists now, but it's irrelevant to me since our loans were resolved years ago.
- Hopefully, it helps those who need it now.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Teacher (San Francisco, CA)
Age: 33 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 0.0 years
Commonness: 8/20
Statement of Opinion:
- We just recently consolidated our loans, but should anything change in our relationship, this policy is reassuring.
- Important protection measure even if not used immediately.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 9 | 9 |
Nurse (Chicago, IL)
Age: 42 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 6.0 years
Commonness: 3/20
Statement of Opinion:
- This policy is necessary for people like me in complex legal situations.
- I really need this separation to align legal matters with financial ones.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 7 |
| Year 20 | 9 | 8 |
Entrepreneur (Denver, CO)
Age: 29 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 6/20
Statement of Opinion:
- It's important this policy might eventually simplify processes for everyone, not just specific cases.
- Currently, seems complex for those without abuse/legal decrees.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
Accountant (Miami, FL)
Age: 56 | Gender: female
Wellbeing Before Policy: 4
Duration of Impact: 15.0 years
Commonness: 3/20
Statement of Opinion:
- This policy would help people like me not carry the burden of an ex-partner's financial missteps.
- Crucial for rebuilding personal credit and financial freedom.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 6 | 4 |
| Year 3 | 7 | 4 |
| Year 5 | 8 | 5 |
| Year 10 | 9 | 5 |
| Year 20 | 9 | 6 |
Sales Executive (Nashville, TN)
Age: 40 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 0.0 years
Commonness: 4/20
Statement of Opinion:
- Policies that offer clarity and independence in finance post-divorce are always welcome.
- Though not directly impacting me now, I appreciate this move.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 8 | 8 |
Film Producer (Los Angeles, CA)
Age: 48 | Gender: other
Wellbeing Before Policy: 5
Duration of Impact: 4.0 years
Commonness: 5/20
Statement of Opinion:
- Wish this policy were broader, allowing more freedom to separate for financial strategy.
- Hope this is a step toward that kind of flexibility for everyone.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 8 | 7 |
Cost Estimates
Year 1: $5000000 (Low: $3000000, High: $8000000)
Year 2: $4500000 (Low: $2500000, High: $7500000)
Year 3: $4000000 (Low: $2000000, High: $7000000)
Year 5: $3500000 (Low: $1500000, High: $6000000)
Year 10: $3000000 (Low: $1000000, High: $5000000)
Year 100: $0 (Low: $0, High: $0)
Key Considerations
- Technology systems will require updates, incurring initial setup costs.
- Administrative costs are anticipated but will decrease over time as the process is streamlined.
- Potential legal considerations related to separating debts for individuals facing abuse could arise.