Almost 30 years ago, a federal law let married couples consolidate their federal student loan debt through a short-lived U.S. Department of Education (ED) program. Couples who took part in the now-defunct program, which ran from 1993 to 2006, became jointly liable for repayment. Yet today, domestic violence survivors who participated in the program could still be on the hook for their abusers’ loans. A proposed bill in Congress could change that.
“When people think about domestic violence, they often think about physical violence mostly because the physical safety dangers are very real,” said Monica McLaughlin, director of public policy at the National Network to End Domestic Violence (NNEDV), a nonprofit organization that advocates to stop domestic violence. “But one of the ways to secure control over a survivor is through economic abuse.”
More than 14,000 borrowers took part in the ED program. But disentangling from consolidated loans can be especially difficult for domestic violence survivors when the other borrower is their abuser. Domestic violence advocates and experts point out that consolidated debt can be a form of economic abuse. Financial abuse occurs in about 99% of domestic violence cases, according to a study from the University of Wisconsin-Madison’s Center for Financial Security.
“A colleague of mine would say that survivors used to show up at shelters with just the clothes on their back, but now they show up with the clothes on their back and crippling debt with low credit scores,” said McLaughlin. “That is often the situation. And that can devastate the rest of their lives.”
She pointed out that an average of three women a day are killed by a current or former intimate partner across the country. The National Intimate Partner and Sexual Violence Survey, which the Centers for Disease Control (CDC) developed, also found based on 2010 data that people who face housing or food insecurities are more vulnerable to abuse. McLaughlin stressed the links between physical violence and economic precarity.
Angela Littwin, who is the Ronald D. Krist Professor in Law at the University of Texas at Austin School of Law, studies consumer debt and domestic violence with Dr. Adrienne Adams, assistant professor of ecological / community psychology at Michigan State University. She explained that economic abuse can come in two forms: financial restriction (i.e. not being allowed to work) and financial exploitation.
“The behavior of consolidated student loans would fall under economic exploitation to make you liable for debt that is not yours,” said Littwin. “Partners can do this via coercive control. And bankruptcy is not even an out because student loans are very hard to discharge in bankruptcy.”
But in April 2021, members of Congress introduced a bipartisan bill to help borrowers sever consolidated federal student loans in the case of domestic violence or divorce. Representative David Price of North Carolina was one of the Congressional members to bring the bill forward, which is called the Joint Consolidation Loan Separation Act.
"The Joint Consolidation Loan Separation Act was created in direct response to my constituent's experience with a damaging joint consolidation loan,” said Price in an email to Diverse. “Unfortunately, borrowers nationwide remain liable for their potentially abusive or uncommunicative former partner’s portion of their consolidated debt. With no legal options for relief, as in the case of my constituent, this debt can be crippling. My colleagues and I were pleased to reintroduce this common-sense, bipartisan legislation—congressional action to fix this problem is long overdue."
If passed, the bill would allow two borrowers to submit a joint application to ED to disentangle the consolidated loan into two separate loans. It also would let one borrower submit a separate application if facing domestic or economic abuse from the other borrower. Similarly, the bill would allow one borrower to file an application if the person cannot reasonably reach or access the loan information of the other borrower.
“There is not a huge universe of people who were part of this program, but this is illustrative of what happens in so many other economic areas of life for domestic violence survivors,” said McLaughlin. “You think about all the ways you intertwine your life with another person’s life in an intimate relationship, and untangling yourself from that is very challenging.”
Rebecca Kelliher can be reached at firstname.lastname@example.org.