Sec. 305. Separating joint consolidation loans
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Section 455(g) ( 20 U.S.C. 1087e(g) ), as amended by section 104, is further amended by adding at the end the following: A married couple, or 2 individuals who were previously a married couple, and who received a joint consolidation loan as such married couple under subparagraph
(C)of section 428C(a)(3) (as such subparagraph was in effect on or before June 30, 2006), may apply to the Secretary for each individual borrower in the married couple (or previously married couple) to receive a separate Federal Direct Consolidation Loan under this part— that shall— unless the Secretary receives notice of an agreement described in subclause (II)(aa), be equal to the sum of— the unpaid principal and accrued unpaid interest of the percentage of the joint consolidation loan that, as of the day before such joint consolidation loan was made, was attributable to the loans of the individual borrower for whom such separate consolidation loan is being made; and any other loans described in section 428C(a)(4) that such individual borrower selects for consolidation under this part; or be equal to the sum of— the unpaid principal and accrued unpaid interest of the percentage of the joint consolidation loan that, as of the date of application under this paragraph, the married couple (or previously married couple) agrees shall be considered attributable to the loans of the individual borrower for whom such separate consolidation loan is being made; and any other loans described in section 428C(a)(4) that such individual borrower selects for consolidation under this part; the proceeds of which shall be paid by the Secretary to the holder or holders— of the joint consolidation loan for the purpose of discharging the liability on the percentage of such joint consolidation loan described in subclause (I)(aa) or (II)(aa) of clause (i); and of the loans selected for consolidation under subclause (I)(bb) or (II)(bb) of clause
(i)for the purpose of discharging the liability on such loans; except as otherwise provided in this paragraph, that has the same terms and conditions, and rate of interest as the joint consolidation loan; for which any payment made under subsection (m)(1)(A) on the joint consolidation loan during a period in which the individual borrower for whom such separate consolidation loan is being made was employed in a public service job described in subsection (m)(1)(B) shall be treated as if such payment were made on such separate consolidation loan; and for which any payment made under an income contingent repayment plan under subsection (d)(1)(D), or an income-based repayment plan under paragraph (1)(E) or (2)(A)(ii) of subsection (d), on the joint consolidation loan shall be treated as if such payment were made on such separate consolidation loan. Except as provided in clause (ii), to receive separate consolidation loans under subparagraph (A), both individual borrowers in a married couple (or previously married couple) shall jointly apply under such subparagraph. An individual borrower in a married couple (or previously married couple) may apply for a separate consolidation loan under subparagraph
(A)separately and without regard to whether or when the other individual borrower in the married couple (or previously married couple) applies under such subparagraph, in a case in which— the individual borrower has experienced from the other individual borrower— domestic violence (as defined in section 40002(a) of the Violence Against Women Act of 1994 ( 42 U.S.C. 13925(a) )); economic abuse (including behaviors that control such borrower’s ability to acquire, use, and maintain access to money, credit, or the joint financial obligations of both borrowers); or other exceptional circumstances, as determined by the Secretary; and the Secretary determines that authorizing each individual borrower to apply separately under subparagraph
(A)would be in the best fiscal interests of the Federal Government, including by reducing the risk of delinquency or default. Notwithstanding section 428C(a)(3)(A), the Secretary shall provide a consolidation loan under this part to each borrower who— applies for such loan under subparagraph (A); and meets the requirements of subparagraphs
(A)and (B). Notwithstanding any other provision of this title, an individual who has a joint consolidation loan and wishes for the Secretary to discharge the loans due to total and permanent disability pursuant to section 437(a), shall first separate the joint consolidation loan in accordance with this section before the Secretary may discharge any portion of the loan. . Section 428C(a)(3)(B)(i)(V) ( 20 U.S.C. 1078–3(3)(B)(i)(V) ) is amended— by striking or at the end of item (bb); by striking the period at the end of item
(cc)and inserting ; or ; and by adding at the end the following: for the purpose of separating a joint consolidation loan into 2 separate Federal Direct Consolidation Loans under section 455(g)(3). .
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- 20 USC 1078–3(3)(B)(i)(V)
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