Bill Overview
Title: Joint Consolidation Loan Separation Act
Description: This act allows two borrowers, who had previously received a joint consolidation loan for their federal student loan debt, to submit a joint application to the Department of Education to sever their consolidated loan into two separate loans. One borrower may submit a separate application in the event that the individual has experienced domestic or economic abuse from the other individual borrower or is unable to reasonably reach or access the loan information of the other borrower. In the case of a borrower who receives a separate consolidation loan due to those circumstances, the other individual borrower must become solely liable for the remaining balance of the joint consolidation loan.
Sponsors: Sen. Warner, Mark R. [D-VA]
Target Audience
Population: People who borrowed federal student loans via joint consolidation
Estimated Size: 14000
- Historically, joint consolidation loans were available between 1993 and 2006, so only borrowers from this period are affected.
- These loans were taken by two individuals, often married couples, and are thus impacted directly.
- Many of these borrowers may have sought to separate their loans due to divorce, financial conflict, or changes in individual repayment capacity.
- The Department of Education has reported that around 14,000 remaining joint consolidation loans are in existence as of recent estimates.
Reasoning
- The population affected by this policy consists of an estimated 14,000 borrowers with existing joint consolidation loans from the period 1993 to 2006. This represents a relatively specific and small group within the larger student loan borrowing population.
- Given the budgetary constraints, the policy impact should focus on individuals who are significantly burdened by the current joint consolidation loan setup - often related to marital status changes, financial strain, or abusive relationships.
- By simulating a diverse range of interviews, we can capture varied circumstances and sentiments about the policy, including people who might be only slightly impacted or not at all, to inform how broadly effective and transformative the policy could be within its budget constraints.
- The U.S. citizenship or residency requirement further narrows the target group, ensuring that only those legally involved with U.S.-based federal student loans are considered.
Simulated Interviews
Software Engineer (Austin, TX)
Age: 45 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 20.0 years
Commonness: 12/20
Statement of Opinion:
- I have been waiting for this kind of policy for years since my divorce.
- Without good communication with my ex-spouse, managing the loan has been a nightmare.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 8 | 5 |
Teacher (Seattle, WA)
Age: 39 | Gender: female
Wellbeing Before Policy: 3
Duration of Impact: 20.0 years
Commonness: 5/20
Statement of Opinion:
- Finally, I can separate my finances from my abusive ex.
- This will allow me to regain control over my financial situation.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 3 |
| Year 2 | 6 | 3 |
| Year 3 | 7 | 3 |
| Year 5 | 8 | 3 |
| Year 10 | 8 | 3 |
| Year 20 | 8 | 3 |
Freelance Consultant (Atlanta, GA)
Age: 50 | Gender: other
Wellbeing Before Policy: 8
Duration of Impact: 0.0 years
Commonness: 6/20
Statement of Opinion:
- The policy is good for those in need, but it doesn't affect me much personally.
- I might consider it if my situation changes in the future.
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 |
Retired (Cleveland, OH)
Age: 60 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 3/20
Statement of Opinion:
- I'm relieved I can finally separate the loan after my spouse's death.
- This policy will help simplify my finances as I manage everything solo now.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 6 | 4 |
Financial Analyst (Chicago, IL)
Age: 32 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 0.0 years
Commonness: 8/20
Statement of Opinion:
- We're happily married and managing our loan just fine, so this doesn't change much for us.
- It's wonderful for those who need it though.
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 | 7 | 7 |
Nurse (New York, NY)
Age: 48 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 15.0 years
Commonness: 4/20
Statement of Opinion:
- This policy removes a source of tension even though we are amicable.
- We'll both be better off without having to juggle the joint loan.
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 | 7 | 4 |
| Year 10 | 7 | 4 |
| Year 20 | 6 | 4 |
Artist (Los Angeles, CA)
Age: 55 | Gender: male
Wellbeing Before Policy: 9
Duration of Impact: 2.0 years
Commonness: 2/20
Statement of Opinion:
- It's a nice option to have but doesn't change anything for me since my loan is paid off.
- It's more about peace of mind.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 9 |
| Year 2 | 9 | 9 |
| Year 3 | 9 | 9 |
| Year 5 | 9 | 9 |
| Year 10 | 9 | 9 |
| Year 20 | 9 | 9 |
Marketing Specialist (Denver, CO)
Age: 42 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 0.0 years
Commonness: 7/20
Statement of Opinion:
- This policy is important for those really struggling with joint loans, but it's not relevant to my personal situation.
- We manage our finances separately already.
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 |
Social Worker (Phoenix, AZ)
Age: 29 | Gender: other
Wellbeing Before Policy: 7
Duration of Impact: 0.0 years
Commonness: 14/20
Statement of Opinion:
- We haven't hit any issues that require this yet, but it's a relief to know it's there if needed.
- Could be vital if things ever got complicated.
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 | 7 | 7 |
Professor (Boston, MA)
Age: 63 | Gender: male
Wellbeing Before Policy: 10
Duration of Impact: 0.0 years
Commonness: 9/20
Statement of Opinion:
- The policy won't affect me as my student loans are paid off.
- I'm glad it's helping others in complex situations.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 10 | 10 |
| Year 2 | 10 | 10 |
| Year 3 | 10 | 10 |
| Year 5 | 10 | 10 |
| Year 10 | 10 | 10 |
| Year 20 | 10 | 10 |
Cost Estimates
Year 1: $3000000 (Low: $2000000, High: $5000000)
Year 2: $3100000 (Low: $2100000, High: $5100000)
Year 3: $3200000 (Low: $2200000, High: $5200000)
Year 5: $3400000 (Low: $2400000, High: $5400000)
Year 10: $3700000 (Low: $2700000, High: $5700000)
Year 100: $4700000 (Low: $3700000, High: $6700000)
Key Considerations
- The success of the program hinges upon effective and efficient processing of applications by the Department of Education.
- There may be an increase in recourse if separated loans end up in default more frequently due to only having one earning source to repay.
- Ensuring adequate support and exceptions for victims of domestic or economic abuse is crucial for the policy's successful implementation.