Illustration by Mother Jones; Getty
When the Biden administration made it easier for Americans doing public service work to forgive their student loans last year, thousands of borrowers saw their debts reduced or completely eliminated. But some have been left behind.
One group of debtors fell through the cracks: couples who used a government program to consolidate their loans after marriage. The plight of borrowers with spousal consolidation loans hasn’t received much media coverage, and new figures obtained through a Freedom of Information request suggest why. According to FOIAed material shared with Mother Jones by the Student Borrower Protection Center, in total, there are only 776 borrowers with spousal consolidation loans who are still in repayment or expected to be repaid in the future. This is only a tiny fraction of the 45 million people in debt in the United States, but their situation can be quite serious.
“It was a very unique product that was created, and the fact that you can’t separate them – I don’t know of any other product designed in this way,” says Persis Yu, director of policy at Student Borrower Protection. Center. “They stopped making these loans in 2006, so they are really old loans at this point.”
Consolidated loans can become particularly problematic when marriages break down.
“Divorce does not have a legal impact on liability for these loans – they were written specifically to say that both borrowers will remain responsible for these loans,” Yu notes. “It requires ex-spouses to work together to make payments.” This could put borrowers in physical danger. “Domestic violence is a very big problem with these loans,” Yu notes. “These loans can actually put victims of domestic violence in a very precarious situation.”
But even when marriages don’t involve violence and end in divorce, spousal consolidation loans can still cause major financial problems.
Chris Alldredge, who created a Facebook group for borrowers with these loans, says his and his wife’s consolidated loan saved them from having their debt forgiven under the Civil Service Loan Cancellation Scheme.
For borrowers like Chris and his wife, whose loans were consolidated in 2005 before the remission program was created in 2007, the issue took on new urgency in 2021 when the Biden administration announced its temporary student debt reform. . The new waiver made it easier for borrowers of certain types of loans to apply for forgiveness. But the waiver did little to settle spousal consolidation loans.
So, after browsing through a Facebook group about loan forgiveness that didn’t have much information related to his specific situation, Chris decided to start a new group. At first, Chris expected his new Facebook group to be small. Prior to 2021, he didn’t know of anyone else who had a spousal consolidation loan. “We are a disparate constellation of stories scattered across the internet,” he says. “It was really lonely not having anyone to talk to about it.”
But connecting on social media with others in a similar situation has helped Chris feel less alone. “It was amazing to know that there were other people who shared the same story,” Chris says. “My wife and I had more or less given up years ago. We were just like, ‘We’re going to die with this. That’s what it’s gonna be, that’s our reality, we’re just gonna take this loan to our graves with us.
Now Chris has pinned his hopes on Congress, where lawmakers have introduced legislation that would allow borrowers of these loans to separate. This would make it easier to forgive her debt to Chris.
“My near-term plans are to figure out how to keep bringing people into our group and to try to get the Joint Consolidation Loan Separation Act passed through Congress and the Senate,” he says. “It’s the only way to make sure we can move forward.”
