Borrowers with a joint consolidation loan with another individual can separate their joint debts into an individual Direct Consolidation loan.
The Joint Consolidation Loan Separation Act (JCLSA) was signed into law on October 11, 2022, and allows borrowers with either Direct Loans (DL) or Federal Family Education Loans (FFEL) to separate their joint debts.
A recent electronic announcement outlines how the Department of Education plans to implement the process and provides guidance to FFEL loan holders and servicers of their responsibilities.
The process will be implemented in two phases:
- Phase I – Requesting a Separation
- Phase II – Separation
The announcement outlines the process for each phase.
FFEL loan holders will offer forbearance or payment suspension for all commercially held FFEL borrowers who request a forbearance or payment suspension until Phase II is implemented and the joint consolidation loan is separated. Forbearance guidance is outlined in the July 19, 2023 Electronic Announcement: LOANS-23-06.
Questions related to JCL FFEL loans and the JCLS process can be directed to Jerry Wallace at Jerry.Wallace@ed.gov or Charee Champ at Charee.Champ@ed.gov.
