Joint Consolidation Loans, also known as Spousal Consolidation Loans, allowed two married federal student loan borrowers to get one consolidation loan. The U.S. Department of Education no longer offers these loan types, but they did from 1993 to 2006.
Through a consolidation loan, your old loans were paid off and you were left with one loan and one monthly payment. This can help streamline the repayment process. Instead of separate monthly payments, you have one joint consolidation loan.
A few things to keep in mind if you have one of these loans:
FFEL Joint Spousal Consolidation Loans
A new law was recently passed to help borrowers with FFEL Spousal Consolidation Loans, and the Department of Education has laid out a path for you to follow to potentially receive forgiveness under PSLF. To take advantage of this, the Department of Education is first advising borrowers to reach out to their loan servicer to request a forbearance while they finalize the steps for the separation process for joint spousal consolidation loans.
You will then want to submit an Employment Certification Form and then reach out to the Department of Education ombudsman office to state that you are a borrower who will be eligible for separation of your joint consolidation loan. Complete the secure assistance request form through the Federal Student Aid (FSA) Feedback System.
*FYI-Once you have filed a complaint through the FSA Feedback System, you will use the same link to log in, add information to your existing case, and request to file a dispute. After requesting assistance, you can expect the FSA Ombudsman Group to do the following:
- research your problem and review any supporting information you share;
- work with you and other offices within ED, your school, your lender, your loan guaranty agency, and the loan servicer or collection agency;
- assist you in identifying and evaluating your options for resolving specific concerns; and if/when necessary, refer you to the appropriate office or organization.
You will finally want to email JointConsolidation@ed.gov to confirm that you have enrolled in a forbearance and processed the form with the Department of Education ombudsman office.
The Department of Education did not have everything set up for the separation process in place before the end of the Account Adjustment period, they are extending this deadline for borrowers with FFEL Joint Spousal Consolidation loans. You will still receive all of the benefits of the Account Adjustment once you are able to proceed with consolidation.
Direct Joint Consolidation Loan
These loans are eligible for PSLF, but there’s a few things to keep in mind:
Both you and your spouse must have been employed full-time by a qualifying employer at the time each of the 120 payments were made to receive full forgiveness of the loan.
If only one of you met the employment requirement, only the portion of the remaining balance attributable to the original loans of that individual would be forgiven. For example, if you were employed full-time by a qualifying employer when each of the required 120 payments was made, but your spouse never worked for a qualifying employer or worked for a qualifying employer only when some of the payments were made, the amount forgiven after the 120th qualifying payment would be the remaining balance of the loan attributable to the loans you originally received that were paid off by the joint consolidation loan. Both you and your spouse would remain responsible for repaying the remaining balance of the loan that is attributable to the loans your spouse originally received.
You can’t receive forgiveness of a joint Direct Consolidation Loan by combining payments made when only you met the employment requirement with payments made while only your spouse met the employment requirement. For example, if only you were working for a qualifying employer when 80 payments were made and only your spouse was working for a qualifying employer when 40 payments were made, the payments cannot be combined to count as 120 qualifying payments that would make the loan eligible for PSLF. This same information can be found here.