How to Separate Your Joint Spousal Consolidation Loan: Application Guide

• If you have a joint spousal consolidation loan, you can now apply to separate your loans through a new process.

• Starting October 1, 2024, the application is available, but it must be sent by mail.

• Once your federal student loans are separated, you’ll each be responsible for your own portion of the debt. You may also qualify for loan forgiveness or an income-driven repayment plan after the separation. A separation completed on or after July 1, 2026 creates loans that can be repaid only under the Repayment Assistance Plan (RAP) or the Tiered Standard Plan.

Two years ago, President Biden signed the Joint Consolidation Loan Separation Act (JCLSA) into law, offering hope to student loan borrowers stuck in joint spousal consolidation loans—a financial arrangement that has made it difficult for borrowers to manage or separate their loans individually.

These loans tied married couples to the same student debt, even after divorce or if the spouse’s student loans were involved.

For years, borrowers with these joint loans had no recourse to separate their debts. Until recently, that hope felt like an empty promise—there was no legal pathway to separate the loans.

Finally, as of September 30, 2024, Phase I of the loan separation process has begun, giving borrowers the opportunity to submit applications and start untangling these complicated debts. This is just the first step in a multi-phase process, with further steps expected in the coming months.

By the end of this guide, you will learn the process and understand the necessary steps to separate your loans successfully.

1. Submit the Application

You must fill out the Combined Application to Separate a Joint Consolidation Loan and Direct Consolidation Loan Promissory Note. This is available in paper form and must be mailed to the correct servicer.

• Eligibility: Borrowers must meet certain eligibility requirements before submitting their applications based on the form.

• Application Process: Once submitted, the Consolidation Originator will review and validate the information provided before the loans are officially separated.

The application must include all necessary documentation, such as protections for situations involving cosigners or domestic violence.

2. Loan Division Based on Borrower Contributions

Your federal loan will be split based on how much each of you originally borrowed.

For example, if you were responsible for 60% of the original loan, you must repay 60% of the separate loan. Your loan terms or interest rate will remain the same after separating the loans.

3. Scenarios for Loan Separation

If both of you apply together, the student loan debt will be split into individual direct consolidation loans. You and your spouse (or former spouse) will each handle your part of the debt separately.

If only one person applies (because of reasons like domestic violence, economic abuse, or not having access to loan details), the student loan repayment responsibilities will be split. The other person will still be responsible for their part.

In these cases, you will need to provide documents that explain the situation.

4. Access to Loan Forgiveness Programs and Repayment Plans

After your loans are separated, your share becomes its own Direct Consolidation Loan at the same interest rate as the joint loan. This can make you eligible for income-driven repayment and student loan forgiveness programs like Public Service Loan Forgiveness (PSLF). If your separate loan is made on or after July 1, 2026, the only income-driven plan open to it is the Repayment Assistance Plan (RAP), and receiving it also ends IBR eligibility for any other federal Direct Loans you hold.

These plans can give you lower monthly payments based on your income.

1. Check and Copy Your Application

Carefully review your Application/Promissory Note to ensure that all information is correct. Make a copy of pages 6 to 16 for your records. This will be your reference if you need to verify any details during the separation process.

Related: How to Get a Copy of a Student Loan Promissory Note

2. Mail the Application

Send the original pages 6 to 16, along with any required documents, to your student loan servicer at the correct address:

• Aidvantage: ATTN: ED Loan Consolidation, PO BOX 300005, Greenville, TX 75403-3005

• EdFinancial: C/O Aidvantage, PO BOX 300008, Greenville, TX 75403-3008

• MOHELA: C/O Aidvantage, PO BOX 300006, Greenville, TX 75403-3006

3. Required Documents

• Repayment Plan Selection: If you are choosing a fixed-payment repayment plan, include the Repayment options form.

• Income-Driven Repayment Plans: If you are selecting an income-driven repayment plan, include the Income-Driven Repayment Plan Request form.

• Legal Documentation: If you are applying based on a legal situation such as a divorce, be sure to include any court orders, divorce decrees, or settlement agreements that validate your claim to separate your loans, including private lender documentation if relevant.

4. Processing Your Application

Once your application is received, the Department of Education will begin the evaluation. If they require additional documents or information, they will contact you directly. This is a detailed review to ensure that all criteria are met for the loan separation process.

5. Keep Making Payments

Until you receive written confirmation that your loan has been successfully separated, you must continue paying for your current joint loan.

Missing payments during this period could result in penalties, late fees, or even loan default, which can severely affect your credit score.

Once your application has been reviewed and approved by the Consolidation Originator, the joint loan will be officially separated, and each borrower’s portion of the loan will be re-consolidated into a new Direct Consolidation Loan. Here’s what to expect:

• Confirmation of Separation: You will receive written confirmation outlining the details of the separation and how much of the remaining balance each borrower is responsible for.

• Forbearance Option: While you’re waiting for the process to finish, you can ask for forbearance if you can’t make payments. This means you can pause your payments for a while, but keep in mind that interest will still build up during this time.

Related: SAVE Plan Forbearance

If you need help with the application or have questions about the process, you can:

• Contact Federal Student Aid: Call 1-800-433-3243 to speak with a representative. Keep in mind that the process is still new, and while they can provide general guidance, some details may still be evolving.

• Check for Updates: Visit the Department of Education’s Joint Consolidation Loan Separation News and Updates page for the latest information or reach out to the Student Loan Ombudsman for further assistance.

• Join Peer Support Groups: Communities like the r/studentloans subreddit or the Spousal Consolidation Do Us Part Facebook group provide spaces where borrowers share experiences and advice about this process.

To separate your joint spousal student loan consolidation, complete the Combined Application to Separate a Joint Consolidation Loan and mail it, along with any required documents, to your student loan servicer.

Include any necessary forms, such as the Repayment Plan Selection or IDR Plan Request, and keep making payments on your current loan until the process is complete.

Aside from the peer groups mentioned earlier, if you’re looking for more personalized support, schedule a consultation with one of our student loan experts today! Get tailored advice and make sure you’re on the right path to managing your personal finances effectively.