The Senate just approved a proposal that could help student loan borrowers. Here’s what we know.
If you have a student loan – especially a consolidated loan with a spouse – you might want to listen!
The Senate has just approved a proposal, and it concerns the consolidation of student loans between spouses.
This proposal will allow borrowers stuck in sticky student loan debt with a spouse — or ex-spouse — to separate those loans.
For some lucky people, that may mean your student loan debt disappears completely under a federal loan forgiveness program.
Oh, how I wish it was me in this situation. I don’t even want to tell you how much my husband and I owe in student loans.
Now, this proposal still needs to be voted on by the House and then approved by President Biden.
But this little bill would close a loophole from the 1990s that allowed married people to consolidate their student loans at a lower interest rate.
Unfortunately, married couples can no longer consolidate their student loans
No, married couples can no longer consolidate their loans. This program was closed in 2006, but those bound by their student loans have had no way of untying those loans.
20 years later, these loans are still reunited, even in the event of a divorce.
But this proposal would change all that.
Happy dancing for all the divorced couples who have had to deal with the unfortunate situation of having their loans united forever.
Now if you contributed 70% of the student debt, you will be responsible for 70% – Thousands of people were stuck with obligations, sometimes from a domestic abuser, that could amount to tens of thousands of dollars .
Another benefit of this proposal is that “civil servants” would be eligible to apply for the Civil Service Loan Forgiveness Scheme (PSLF).
To benefit from it, a person must work in a qualification scope: US federal employee, state employee, local or tribal government employee, or employee of a non-profit organization.
If two spouses had their loans merged and only one of those individuals had a qualifying job, they were not eligible for the PSLF.
But, once the loans are separated, the employee who qualifies may be able to take advantage of the PSLF.
BEETEEDUBS: The current PSLF waiver expires in October this year. Go. Go to the website and see if you qualify.