
Navigating student loan spousal consolidation separation can be a daunting task, but understanding the basics is key to making informed decisions. You can consolidate your spouse's federal student loans into a single loan, reducing monthly payments.
This consolidation process typically takes 30 to 90 days and involves submitting a consolidation application to the U.S. Department of Education. You'll need to provide your and your spouse's information, including Social Security numbers and loan details.
Having a clear understanding of the consolidation process can help you avoid potential pitfalls. For example, consolidating your spouse's loans may affect your credit score, as you'll become the co-signer on the new loan.
Understanding Student Loan Consolidation
The Joint Consolidation Loan Separation Act allows joint consolidation borrowers to separate their loans into individual Direct Consolidation Loans.
This process is divided into two phases: Requesting a Loan Separation (Phase I) and Separation (Phase II). The Consolidation Originator will process and validate the application within 10 business days.
You can choose to combine your part of the debt into a new loan for a lower interest rate, making you eligible for different repayment and student loan forgiveness programs.
These plans can give you lower monthly payments based on your income.
History of Loans
Before July 1, 2006, married couples were allowed to consolidate their individual federal student loans into a single joint consolidation loan. These loans were available under both the William D. Ford Federal Direct Loan Program and the Federal Family Education Loan Program.
The intent was to simplify repayment for couples with multiple loans, but this came with a significant drawback. Both borrowers became jointly and severally liable for the entire loan balance, regardless of future changes in their marital status.
The Joint Consolidation Loan Separation Act was enacted to fix this problem, allowing these joint loans to be separated into individual loans. This allows each borrower to gain access to better repayment options.
Understanding Loan Act
The Joint Consolidation Loan Separation Act allows joint consolidation borrowers to separate their loans into individual Direct Consolidation Loans. This applies to borrowers with both Direct Loans and Federal Family Education Loans.
Borrowers can take advantage of this program by going through two phases: Requesting a Loan Separation and Separation. The Consolidation Originator will process and validate the application within 10 business days.
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If you mistakenly send the form to an FFEL servicer or loan holder, they are required to forward it to the Consolidation Originator. After Phase I, your application will be held until Phase II begins.
The Joint Consolidation Loan Separation Act was signed by President Joe Biden, allowing couples who combined their student loans when they were married to separate the debt. This opens up the possibility for some borrowers to have part of their debt forgiven.
In 2006, Congress eliminated a program that allowed married couples to merge their student debt into a joint loan in exchange for a lower interest rate and single payment. Through this program, couples became legally responsible for each other's debt.
The Joint Consolidation Loan Separation Act allows borrowers to split their loans based on the initial amount each owed into two separate federal direct loans with the same interest rates as the joint consolidation loan. Borrowers must apply through the Education Department, which requires both parties to approve the separation.
Those who show evidence that they have experienced domestic violence, economic abuse, or have an unresponsive partner are able to apply themselves. More than 14,700 people combined their debt between 1993 and 2006, and a recent NPR investigation found that about 14,000 borrowers are still handcuffed to each other 16 years later.
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Overview
These joint consolidation loans used to tie married couples together financially, even after divorce or separation. This was the case until July 1, 2006, when the program was eliminated.
The Joint Consolidation Loan Separation Act (JCLSA) was enacted to fix this problem, allowing joint loans to be separated into individual loans. This allows each borrower to gain access to better repayment options.
For many borrowers, this became a major issue after separation or divorce, as they were legally tied to their former spouse's loan obligations. This is because both borrowers became jointly and severally liable for the entire loan balance, regardless of future changes in their marital status.
The JCLSA allows joint consolidation borrowers to separate their loans into individual Direct Consolidation Loans. This applies to borrowers with both Direct Loans (DL) and Federal Family Education Loans (FFEL).
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Separating Student Loans
You can now apply to separate your joint spousal consolidation loans, a financial arrangement that has made it difficult for borrowers to manage or separate their loans individually.
Starting September 30, 2024, borrowers can begin the separation process by submitting the Combined Application to Separate a Joint Consolidation Loan and Direct Consolidation Loan Promissory Note.
The application process is divided into two phases: Requesting a Loan Separation (Phase I) and Separation (Phase II). The Consolidation Originator will process and validate the application within 10 business days.
To be eligible, borrowers must meet certain requirements, which are outlined in the Combined Application. Once submitted, the Consolidation Originator will review and validate the information provided before the loans are officially separated.
The loans will be split proportionately to how much you originally owed as an individual, and you’ll retain the same interest rate you had with the joint consolidation loan.
Here are the steps to separate your joint consolidation loans:
- Fill out the Combined Application to Separate a Joint Consolidation Loan and Direct Consolidation Loan Promissory Note.
- Mail the completed application to the correct servicer.
- If you and your co-borrower are both eligible, you must each submit your own Application/Promissory Note and check the same item in Section 10.
- If you are experiencing domestic violence, economic abuse, or have an unresponsive partner, you can apply for loan separation on your own.
- Send the completed application(s) along with a copy of divorce decree if needed to the appropriate address.
Note: The application process is still under development and is expected to become available sometime in late 2024.
Applying for Loan Separation
Applying for loan separation is a crucial step in regaining financial independence. The Joint Consolidation Loan Separation Act allows borrowers to separate their joint consolidation loans into individual Direct Consolidation Loans.
To start the process, you'll need to submit the Combined Application to Separate a Joint Consolidation Loan and Direct Consolidation Loan Promissory Note. This form is only available in paper form and must be mailed to the correct servicer.
The application process involves two phases: Requesting a Loan Separation (Phase I) and Separation (Phase II). Phase I requires you to submit the application, which will be processed and validated by the Consolidation Originator within 10 business days. If you've experienced domestic violence, economic abuse, or have an unresponsive partner, you can apply for separation yourself.
Here's a breakdown of the application options:
- Joint Application: Both borrowers must apply and agree to separate their loans based on their original balance percentages.
- Separate Application: Only one borrower needs to apply, and the other borrower will be responsible for the remaining balance on the original loan. This option is typically available to borrowers who can certify they are victims of domestic violence or economic abuse.
It's essential to note that the application process is still under development, and the Education Department expects to make it available in late 2024. Borrowers can contact the federal student loan ombudsman group to stay informed and receive a notification when the application opens up.
Phase II: Loan Process Revision
In Phase II, the Consolidation Originator will separate your joint consolidation loan and create new individual Direct Consolidation Loans for each borrower.
The Department of Education will notify you when this phase starts, and if additional documentation is required, they will follow up.
After the loans are separated, both borrowers will have their own individual loan balances based on the percentage of the original balance that was attributed to each borrower's loans when the joint consolidation loan was made.
The new loan balances will be split proportionately to how much each borrower originally owed as an individual.
A borrower who can certify they are a victim of domestic violence or economic abuse can apply for loan separation separately, without the other borrower's approval.
This process is typically only available to borrowers who can certify they are victims of domestic violence or economic abuse.
Here's a breakdown of the two application processes:
- Joint application: Both coborrowers must apply for loan separation, and their debt will be split into individual direct consolidation loans.
- Separate application: Only one of the coborrowers needs to apply, and the coborrower who applies will have their portion of the debt converted into a direct consolidation loan; the other borrower will be responsible for the remaining balance on the original loan.
Application Options
You have two options to apply for loan separation under the Joint Consolidation Loan Separation Act (JCLSA).
The JCLSA allows joint consolidation borrowers to separate their loans into individual Direct Consolidation Loans. This process is divided into two phases: Requesting a Loan Separation (Phase I) and Separation (Phase II).
There are two ways to apply for loan separation: joint application or separate application.
To apply jointly, you and your co-borrower must complete the Combined Application to Separate a Joint Consolidation Loan and Direct Consolidation Loan Promissory Note application. You'll need to fill out the Joint Agreement, where you and your spouse agree to separate your loans based on your original balance percentages.
If you're applying separately due to economic abuse or domestic violence, you can submit a Separate Application to Separate Your Loans.
Regardless of which option you select, the co-borrower does not sign your Application/Promissory Note. You must each submit your own application and check the same item in Section 10.
Here are the addresses where you can send your completed application(s):
- Aidvantage: PO BOX 300005, Greenville, TX 75403-3005
- Edfinancial: PO BOX 300008, Greenville, TX 75403-3008
- MOHELA: PO BOX 300006, Greenville, TX 75403-3006
Application
The application process for loan separation under the Joint Consolidation Loan Separation Act (JCLSA) can be a bit complex, but it's actually pretty straightforward once you know the basics.
You can apply for loan separation in two ways: joint application or separate application.
If you and your co-borrower agree to separate the loan, you'll each need to submit a separate Combined Application to Separate a Joint Consolidation Loan and Direct Consolidation Loan Promissory Note (App/Note) to the Consolidation Originator.
The Consolidation Originator will process and validate the application within 10 business days.
If you cannot submit a joint application with your co-borrower due to special circumstances, such as domestic violence or economic abuse, you can apply separately.
Here are the two application options:
After Application
After you apply for loan separation, the Consolidation Originator will review and validate the information provided. This process takes around 10 business days.
You will receive written confirmation outlining the details of the separation and how much of the remaining balance each borrower is responsible for. This confirmation will be sent to you once the joint loan is officially separated.

If you're waiting for the process to finish, you can ask for forbearance if you can't make payments. This means you can pause your payments for a while, but keep in mind that interest will still build up during this time.
Here's what to expect after your application has been reviewed and approved:
- Confirmation of Separation: You will receive written confirmation outlining the details of the separation and how much of the remaining balance each borrower is responsible for.
- Forbearance Option: You can ask for forbearance if you can't make payments while you're waiting for the process to finish.
Note: The entire loan separation process typically takes several weeks to complete. Be patient and stay in touch with your Consolidation Originator for updates.
Special Considerations for Non-Applicant Borrowers
When you're not the primary borrower, things can get a bit more complicated. Non-applicant borrowers may still have a say in the consolidation process, but their rights and responsibilities vary depending on the loan type.
In federal student loan consolidation, non-applicant borrowers can still be held responsible for the debt, even if their name isn't on the loan. This means they may still need to make payments or be contacted by the lender.

Non-applicant borrowers on private student loans, on the other hand, are generally not responsible for the debt unless they co-signed the loan. But if they did co-sign, they'll need to understand their obligations and potential consequences.
In some cases, non-applicant borrowers may be able to release their liability on a federal student loan by submitting a request to the Department of Education. This can be done through the Student Loan Servicing Alliance.
Non-applicant borrowers should also be aware that their credit score may be affected if their spouse or partner defaults on the loan. This can happen even if they're not directly responsible for the debt.
Benefits and Drawbacks
A spousal consolidation loan can be a complex financial situation, especially during separation.
You're locked into a financial obligation with your spouse, which can be difficult or costly to get out of, especially if you decide to get divorced.
One of the main drawbacks is the unpredictable nature of your financial situation and your relationship, making it hard to repay the combined debt.
If you have a joint loan, both you and your spouse are equally responsible, no matter how much of the debt was originally yours.
You cannot release the name of someone on a joint loan, so you'll need to work with your spouse to repay the debt.
Forbearance Options
Forbearance Options can provide temporary relief during the loan separation process. Borrowers can request forbearance to ease the burden while their loans are being separated.
FFEL loan holders are encouraged to offer forbearance or payment suspension for borrowers who apply for loan separation. This is especially helpful for commercially held FFEL joint consolidation borrowers.
The Department of Education recommends that forbearance remain in place until Phase II is complete and the loans are officially separated.
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The Drawbacks
A joint consolidation loan can be a double-edged sword. It may lock you into a financial obligation with your spouse that's difficult or costly to get out of, especially if you decide to get divorced.
You're equally responsible for the debt with your spouse, regardless of how much of it was originally yours. This can be a significant drawback, especially if you have different financial priorities or income levels.
Releasing the name of someone on a joint loan is not an option. This means you're stuck with the debt together, even if your relationship changes.
The lender may not always be willing to release a co-signer on a joint loan, even if you ask nicely. This can make it tough to get out of the loan if you need to.
Loan Forgiveness and Relief
After separating your student loans, you can combine your part of the debt into a new loan for a lower interest rate, making you eligible for different repayment and student loan forgiveness programs.
These programs can give you lower monthly payments based on your income, which can be a huge relief. You can choose from Income-Driven Repayment plans like SAVE, IBR, or ICR.
Income-Driven Repayment plans can help you pay a portion of your income towards your loans each month, rather than a fixed amount. This can make your payments more manageable and affordable.
Public Service Loan Forgiveness (PSLF) is another option that can forgive your remaining balance after making 120 qualifying payments. This can be a game-changer for those working in public service jobs.
By taking advantage of these programs, you can potentially save thousands of dollars in interest payments over the life of your loan.
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Organizing and Managing Loans
The Joint Consolidation Loan Separation Act (JCLSA) allows joint consolidation borrowers to separate their loans into individual Direct Consolidation Loans, providing financial independence and access to a broader range of repayment options.
This process is divided into two phases: Requesting a Loan Separation (Phase I) and Separation (Phase II). The Consolidation Originator will process and validate the application within 10 business days.
You can choose to combine your part of the debt into a new loan for a lower interest rate after your loans are separated, making you eligible for different repayment and student loan forgiveness programs.
These programs can give you lower monthly payments based on your income, such as Income-Driven Repayment plans (SAVE, IBR, ICR) or Public Service Loan Forgiveness (PSLF).
The application process for separating joint consolidation student loans is still under development, with a delayed release expected in late 2024.
To separate your joint consolidation loans, you'll need to apply through the Education Department's application process, which will become available in late 2024.
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Frequently Asked Questions
Is a spouse responsible for their spouse's student loan debt?
Typically, a spouse is not responsible for their partner's pre-marriage student loan debt, unless they co-signed the loan. However, both spouses may be liable for new student loans taken out after marriage
Sources
- https://www.moneywiselaw.com/separate-joint-consolidation-loans/
- https://www.tateesq.com/learn/spousal-consolidation-student-loans-divorce
- https://thecollegeinvestor.com/20997/spousal-student-loan-consolidation/
- https://www.usatoday.com/story/news/nation/2022/10/12/president-biden-student-loans-couples-separate-debts/8173052001/
- https://www.nerdwallet.com/article/loans/student-loans/how-to-split-up-your-joint-spousal-consolidation-student-loan
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