Joint Consolidation Loan Separation Act

Floor Speech

While I fully support the underlying intent of S. 1098, the Joint Consolidation Loan Separation Act, I have concerns about the bill as drafted. The purpose of this bill is to protect student loan borrowers who consolidated their loans with a spouse but now seek to reverse this process. Yet, as written, this bill undermines that purpose.

I am concerned this bill will hurt the very borrowers we are trying to help. We never want to see a spouse, especially one that is a victim of domestic violence, forced to be financially tied to his or her abuser. We want to give these borrowers a way out. However, we also recognize that it is not only the abused spouse who may be applying for these new consolidations.

Under the Senate-passed language, when a borrower files for a new consolidated loan, he or she could potentially leave his or her spouse with the remaining balance. We must be cognizant of the fact that a borrower could use this new legislation as a weapon. This is why we need safeguards in place to ensure that both parties are not subject to potential abuse through the separation process and not just the one filing for a new consolidation.

Additionally, the Department of Education has stated that it will take 12 to 18 months to implement this bill. Given the urgency of the situation that many borrowers are in, this kind of delay is unacceptable. We need to provide these borrowers with a quicker way out of their joint consolidation loan. Yet, Democrats rejected the Republicans' solution that will give these borrowers an almost immediate separation without unnecessary paperwork that will bog down the process.

Further, I am concerned that this bill could be used by the Secretary of Education to stage an even broader takeover of student loans. It would be simpler and more straightforward to allow these loans, once separated, to remain with their current holder, but instead, this legislation attempts to drive as many of these loans as possible into the government-run Direct Loan program.

We have ample evidence to believe that the Biden Department of Education will take the inch given in this legislation and use it to go a mile. The administration's illegal expansion of the income-driven repayment program and Public Service Loan Forgiveness program, let alone Biden's student loan bailout, are evidence of that.

For example, the vague language included in this bill, namely, the authority for the Secretary of Education to allow for new consolidation loans if it is in ``the fiscal interest of the Federal Government.'' The Department of Education has not been able to provide clarity on what this phrase means or how it applies to this bill, but it has been used previously by this administration to force billions of dollars' worth of loans made by private lenders onto the government's books. Moreover, the President's $1 trillion transfer of wealth from hardworking taxpayers to college graduates clearly illustrates this administration had no intention of protecting ``the fiscal interests of the Federal Government.''

We must not create any loopholes or back doors for the Biden administration to exploit. Transferring massive amounts of student loan debt to taxpayers is harming our economy and setting a horrible precedent for future borrowers, not to mention failing to solve the underlying problems in postsecondary education.

Because of these issues, Republicans have a solution that will allow student loan servicers to separate joint consolidation loans almost immediately, instead of having to wait over a year to receive relief.

Our solution is a commonsense and practical way to accomplish the same goal as this legislation but more quickly and efficiently.

Republicans are willing to work across the aisle to ensure borrowers are taken care of, but unfortunately, Democrats are more focused on opening more avenues for the administration to expand its radical loan bailout.

Mr. MURPHY of North Carolina. Mr. Speaker, first and foremost, I want to say how deeply I appreciate Mr. Price's hard work over the last couple of years on S. 1098. I thank him very much for his efforts on this key and very bipartisan issue.

It is clear that there is bipartisan support that victims of spousal abuse should be able to sever these consolidation loans without penalty or delay. I don't think that is the question. The question here is the change in the calculus because of what President Biden has done.

While I support the intention of this bill to separate these loans, President Biden's unconstitutional, only-able-to-be-done-because-of- his-abuse-of-power student loan giveaway has drastically changed the context in which we consider this bill. The President, in his actions, has undermined what was a clear bipartisan effort.

S. 1098 gives the administration the authority and creates a pathway which could be used for loan forgiveness, again taking money from people who didn't benefit from a college education and making those individuals pay for it.

Once these loans are separated into the Direct Loan Program, these loans will be eligible for Biden's near-trillion-dollar student loan giveaway. Republicans made a good-faith effort to amend this legislation to protect taxpayers, but Democrats refused to close this loan forgiveness loophole.

Our Republican solution, the Simplified Joint Consolidation Separation Act, will allow borrowers to separate their loans in a more timely manner to expedite financial freedom while protecting taxpayers by focusing on the administration's authority to directly aid those most in need.

This targeted, commonsense legislation should garner immediate support from both sides of the aisle and will actually correct the issue that we all want solved.

Mr. Speaker, my amendment to S. 1098 would establish a more efficient process for separating joint consolidation loans to ensure timely relief for borrowers, protect victims of abuse seeking to sever their financial entanglement with their abuser, and protect taxpayers by ensuring that the Secretary's authority is narrowly tailored to help those in need.

It allows borrowers to separate their loans immediately rather than having to apply for a new loan in the Direct Loan Program, a process that can take as long as 18 months to implement.

Moreover, it ensures that those who are victims of economic or domestic abuse can split their loans without opening up avenues for their abuser to game the system and inflict further harm on those we are trying to help.

This is a commonsense fix to a bill that all of us agree is well- intended but falls short of ensuring adequate safeguards for borrowers.

S. 1098 also fails to protect against the abuse of executive authority, something this administration has already proven it will happily do.

If we adopt the motion to commit, we will instruct the Committee on Education and Labor to consider my amendment to S. 1098 to establish a more efficient process for separating joint consolidation loans to ensure timely relief for borrowers that need it.

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Ms. FOXX. Mr. Speaker, I urge my colleagues to pass the amendment so we can provide timely relief to the borrowers who need it, and I reserve the balance of my time.

Mr. Speaker, I urge my colleagues to consider the solution Republicans have put on the table. Borrowers wanting out of joint consolidated loans should have the opportunity to separate, but the method we use to get this done is important.

S. 1098, the Joint Consolidation Loan Separation Act, will take the Department 12 to 18 months to implement, far too long for some borrowers who are in urgent need of help. This legislation could also backfire on the very borrowers we are all working to help.

Additionally, this bill's sloppy and vague language could pave the way for even more Federal power grabs over the student loan system. Given what we have seen from this administration, we cannot open any doors to further student loan debt schemes.

Bottom line, S. 1098 delays support for borrowers who need assistance immediately, cedes more control to the Education Secretary, and fails to protect the borrowers and taxpayers.

Mr. Speaker, I urge my colleagues to oppose this legislation, and I yield back the balance of my time.
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Ms. FOXX. Mr. Speaker, on that I demand the yeas and nays.

The yeas and nays were ordered.

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