In the 2000s, a short-lived program allowed married couples to consolidate student loans at a lower interest rate. Many are now missing out on loan forgiveness worth thousands of dollars.
Teachers, firefighters, and government workers want to separate their student loans from their spouses in order to get Public Service Loan Forgiveness. President Biden restructured the program in October. However, borrowers must submit their paperwork by October in order to be eligible for the benefits aEUR”, including student loan forgiveness after 120 qualifying payments.
“We keep receiving these notices about the Public Service Loan Forgiveness waiver. You could qualify,” said Becki Vallecillo, a long-time kindergarten teacher in Anderson, S.C. It’s worth it,” says Becki Vallecillo (a long-time Anderson kindergarten teacher). “It’s heartbreaking every time.”
Eric Vallecillo, Vallecillo’s husband, and their son, Eric, discovered early that they didn’t qualify. They are both a kindergarten teacher, and school counselor. Their loans are consolidated.
She has spoken to her loan servicer many times by phone. “The last time it was done, I was literally in tears at the end. Vallecillo said that I spent four hours getting transferred. The answer is always the exact same.
Through spousal consolidation, more than 14,000 borrowers merged their student loan debts in the late 1990s/early 2000s. This offered borrowers the opportunity to pay one monthly payment and receive a lower interest rate.
There was one problem: Once the loans were merged, there was no way to seperate them. These debts can’t be repaid, even in the event of divorce or domestic violence. Although Congress removed the option of spousal consolidation in 2006, it did not create a system for dealing with participating borrowers.
Many borrowers, regardless of marital status, are not eligible for thousands in relief assistance. Many times, the total debts are more than $100,000. In some cases, couples owe more that $200,000.
Two Democratic legislators, Sen. Mark Warner from Virginia and Rep. David E. Price from North Carolina, claim they have a simple solution: They simply need to change the wording and allow for the loans’ separation. The bill was first introduced in April 2021. However, the Joint Consolidation Loan Separation Act has been entangled in the larger debate about student loan forgiveness.
“I don’t think you should get rid of all student loan, but that would be amazing, right?” Patrick Shattuck is a Santa Ynez High School English Teacher. This is all I want to do.”
Shattuck, who is divorcing, owes more that $170,000 in debts with his ex-wife. The vast majority of this debt is not his.
After NPR’s investigation into the program, affected borrowers began to work together to coordinate their lobbying efforts. A Facebook group was formed by the affected borrowers, with nearly 400 members across the country. It aims to help reframe the issue. It worked. They were able to get the bill back before the Senate in May with renewed hope.
Shattuck said, “It’s almost like if the moment that this is brought up to the attention of politicians is the moment they’re like, ” “This is a slam-dunk.”
The bill has been stalled yet again. With the possibility of loan forgiveness being extended, both lawmakers and borrowers are growing increasingly frustrated.
“I feel like crying, ’cause it’s like, ‘Oh God, what have you done?’ Cynthia Malone says. She is a licensed clinical social worker with Columbia’s public defender’s Office in Missouri. She is involved in the rehabilitation of death row prisoners and with appeals to reinvestigate cases.
She is married to a probation officer. They have combined more than $110,000 in student loans and decades of public service.
Malone said that the most difficult part of their situation was watching their fellow couples with similar experiences aEUR”, but no spousal consolidation, aEUR”, have their debts forgiven. They made one wrong choice that they regret.
The confusion surrounding PSLF does not only affect joint consolidation borrowers. According to the Student Borrower Protection Center, only 2% of the 9,000,000 borrowers who are eligible for the new PSLF waiver have received relief.
Even if President Biden extends PSLF waiver beyond October to give borrowers more time for qualification, joint consolidation borrowers won’t stop waiting. Only Congress can change their circumstances. Malone said that her husband and she try to not think about the debt until then.
NPR interviewed almost all joint-consolidation borrowers to find out how they would live if they could claim PSLF.
They want to save for the future and not pay interest on the past.
