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Bill to Divide Spousal Student Loans Heads to the House

Monday’s House Rules Committee vote approved a bill that allows borrowers to cancel spousal student loans. This could potentially make hundreds more Americans eligible for loan forgiveness.

The committee was also represented by Democrats. They discussed how the bill would finally allow individuals to withdraw from the program in divorce cases or instances of domestic violence.

Chairman Jim McGovern (D.Mass.) stated that victims of domestic violence and economic abuse shouldn’t have to pay their abusers’ debts. “Closing the loophole is common sense.

The bill was approved by the committee 7-3. It is expected to be up for a vote on Tuesday.

The program allowed nearly 15,000 students to combine their student loans between 1993 and 2006. Couples were also permitted to agree to pay each other’s debts according to The Washington Post.

However, the program did not allow for the separation of the joint debt. This left some people with the debt of their ex-partners or abusers.

The Post reported that approximately 770 loans are still unpaid.

Program participants would be eligible for the Public Service Loan Forgiveness program before the Oct. 31 deadline. President Biden recently announced a student loan forgiveness program that provides up to $20,000 for federal borrowers with incomes below $125,000.

Rep. Bobby Scott (D.Va.), stated that “this bill comes at an important time as many borrowers seek relief from President Biden’s recently-announced loan cancellation program.”

“Simply put, we are providing loan relief to borrowers by supporting the Joint Consolidation Loan Separation Act.”

The GOP committee members raised a variety of concerns about the bill. They questioned whether the bill could be enacted in the time needed to allow participants to apply to forgiveness programs. And they expressed concern that there was no detail on how debt would be transferred to each party if the loans were split.

Virginia Foxx, a Republican from North Carolina, proposed an amendment to address those concerns. It was defeated 7-3 by Democrats, who dismissed the GOP concerns.

McGovern stated that McGovern’s amendment was intended to “disrupt a bill to aid victims of domestic abuse.” It means that nothing is done. This will mean that there won’t be a relief. I believe that this would be a big mistake.”

On June 15, the Senate unanimously approved the bill.

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