A short-lived program in the early 2000s allowed married couples to consolidate their student loans for a lower interest rate. Now, many are missing out on thousands of dollars in loan forgiveness.
Teachers, firefighters and government workers are clamoring to disentangle their student loans from those of their spouse in time to erase their debt with Public Service Loan Forgiveness (PSLF). President Biden revamped the program last October, but in order to receive the benefits — including forgiveness for student loans after 120 qualifying payments — borrowers must have their paperwork in by October of this year.
"We keep getting these notices about, 'Hey, the Public Service Loan Forgiveness waiver, you could qualify. Try it,' " says Becki Vallecillo, a long-time kindergarten teacher in Anderson, S.C. "And it's heartbreak every single time."
Vallecillo and her husband, Eric, found out early on that they don't qualify. As a kindergarten teacher and a school counselor they meet every criterion, but one: Their loans are consolidated.
She's been on the phone many times with her loan servicer. "The last time I did it, I literally was in tears by the end. I had spent like four hours on a Saturday getting transferred and bounced around: 'Go to this website, do this paperwork, talk to this person,' " Vallecillo says. But the answer is always the same.
More than 14,000 borrowers combined their student loan debt in the late 1990s and early 2000s through a process called spousal consolidation. It offered borrowers the lure of a single monthly payment and a lower interest rate.
But there was a fundamental flaw: The program had no way to separate the initial loans once merged. Even in cases of divorce or domestic violence, these debts cannot be unraveled. Congress eliminated the spousal consolidation option in 2006 but never created a system to deal with the participating borrowers.
Now, many borrowers — no matter their marital status — are missing out on thousands in relief aid. In many cases the combined debts run more than $100,000, and in some cases couples owe more than $200,000.
Two Democratic lawmakers: Sen. Mark Warner of Virginia and Rep. David E. Price of North Carolina, say they have a simple fix: Change the wording and allow the loans to be separated. They first introduced a bill to do that in April 2021, but since then the proposed Joint Consolidation Loan Separation Act has become entangled with the larger debate over student loan forgiveness.
"I'm not saying you should just get rid of all student loans, which would be awesome, right?" says Patrick Shattuck, a high school English teacher in Santa Ynez, Calif. "I'm just saying, 'Can I please pay my share?' That's all I want to do."
Shattuck is divorced and yet still owes more than $170,000 in combined debt with his ex-wife, the vast majority of which is not his own.
A few months ago, after an NPR article looked into the program, affected borrowers started working together to coordinate their lobbying efforts. They formed a Facebook group, now with almost 400 members from across the country, hoping to reframe the issue. It worked. Their efforts got the bill back in front of the Senate with a newfound hope in May.
"It's almost as if the minute that this is brought to the attention of politicians, they're like, 'this is a slam dunk,' " Shattuck says.
But the bill is already stalled again. And with the prospect of broader loan forgiveness looming, borrowers and lawmakers are getting antsy.
"I feel like crying 'cause I'm like, 'Oh, God, what have we done?' " says Cynthia Malone. She's a licensed clinical social worker with the public defender's office in Columbia, Mo. She works with the death row population and the appeals process to reinvestigate claims.
She's married to a probation officer. Between them they have decades of public service — and more than $110,000 in combined student loans.
Malone says the hardest part of their situation is watching their colleagues with identical experience — but no spousal consolidation — have their debts forgiven. She feels left behind because of one choice they made a long time ago at the urging of their loan servicer.
But the confusion around PSLF is not limited to joint consolidation borrowers. A new estimate from the Student Borrower Protection Center suggests that, of the 9 million borrowers eligible under the new PSLF waiver, only 2% have received relief.
Even if President Biden extends the PSLF waiver past October, to allow borrowers more time to qualify, joint consolidation borrowers will continue waiting. The only thing that can change their situation is an act of Congress. Until then, Malone says she and her husband try not to think too much about all that debt.
When asked how their lives would change if they could claim PSLF, almost all the joint-consolidation borrowers interviewed by NPR wished for the same thing: a savings account.
They hope to start saving for the future, rather than paying interest on the past.
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