A Guide to Splitting Up Joint Spousal Consolidated Loans

Rebecca SafierUpdated June 27, 2025

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Before 2006, spouses with federal student loans had the option of combining them into a joint consolidation loan. Consolidating student loans helped some couples manage their payments more easily, but for some, it led to a variety of problems. If the couple divorced, for example, they had no option to separate their loans and remained responsible for each other’s debt. Fortunately, a new path to separating joint spousal consolidation opened up.In 2022, the Joint Consolidation Loan Separation Act (JCLSA) was signed into law to allow joint consolidation loan borrowers to separate their joint loan obligations and reconsolidate into new individual Direct Consolidation Loans. This new law allows borrowers struggling with their joint consolidation loans to receive significant benefits previously unavailable to them.

Steps to Separate Joint Spousal Loans

Joint consolidation loan co-borrowers are now able to apply to separate their joint loan obligation into individual Direct Consolidation Loans by completing a Combined Application to Separate a Joint Consolidation Loan and a Direct Consolidation Loan Promissory Note.The amount you’ll be responsible for will be proportional to the amount you brought into the consolidation loan originally. If 60% of the debt was yours, for instance, you’ll be responsible for 60% of the current balance. The only exception is if a divorce decree or other documentation specifies a different split.

Exceptions to the Rule

While the Department of Education says that both borrowers will need to apply for an individual Direct consolidation loan, there are some exceptions to this rule. You can apply on your own if you were a victim of domestic violence or economic abuse. You can also apply solo if you’re unable to access the other borrower’s information. In this case, your co-borrower will become solely responsible for the remaining balance of your joint consolidation loan.

Congress Passed Legislation to Allow Splitting of Student Loans

Joint spousal consolidation loans were available before 2006 for federal student loans from the Federal Family Education Loan (FFEL) program. Borrowers were allowed to combine their loans into one, but there was no way to separate them again, even in the event of divorce or domestic abuse. In the fall of 2022, Congress passed the Joint Consolidation Loan Separation Act of 2021. President Joe Biden signed this act into law shortly after. Thanks to this new legislation, borrowers now have the option of separating their FFEL joint spousal loan into two Direct consolidation loans in their name. As mentioned, borrowers with qualifying circumstances, such as domestic violence or economic abuse, can also free themselves from their current or former spouse’s debt.

What Happens if You Don't?

It’s not mandatory to separate your joint spousal consolidation loan — the Department of Education is now simply providing the option. If you want to continue consolidating loans with your wife or husband, you have the option to do so.Keep in mind that your joint spousal consolidation loan is part of the FFEL program and is not eligible for Direct loan consolidation. If you want to apply for Direct loan consolidation to make your loans eligible for certain federal programs, you’ll have to separate it out first. Plus, if you put your joint spousal loan on income-driven repayment, the Department of Education will base your payments on both your and your spouse’s income, regardless of whether you’re divorced or file taxes separately.

Can Splitting Consolidated Student Loans Help Get PSLF?

Splitting up a joint spousal consolidated loan can be a lifesaver for borrowers who are pursuing Public Service Loan Forgiveness (PSLF). For the joint spousal loan to be eligible for PSLF, both borrowers had to work in public service for 10 years. Plus, FFEL loans must be consolidated into the Direct loan program to qualify for PSLF, an option that’s not available to joint spousal loans. Splitting your consolidated loan can make it eligible for PSLF and make the employment requirement less difficult to meet. In 2025, the Department of Education posted: “ Borrowers who are pursuing Public Service Loan Forgiveness (PSLF) temporarily will see missing payments on any new Direct Consolidation Loans that are a result of separating their joint consolidation loan. Updated PSLF information will display later this year.”

The Takeaway

While the joint spousal consolidation loan was helpful for partners who wanted to manage their debt together, it had major problems that hadn’t been addressed until now. It was previously impossible to separate these loans after consolidating them, creating a difficult situation for divorced borrowers. And since these loans aren’t eligible for Direct loan consolidation, they’re not eligible for federal benefits or programs like PSLF. If you decide student loan refinancing is right for you, Lantern can help you refinance student loans and compare offers from multiple lenders.Explore refinancing options

Frequently Asked Questions

Can you separate consolidated student loans?

What are joint spousal consolidated loans?

What are common challenges when splitting up joint loans?

Photo credit: iStock/Jovanmandic

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About the Author

Rebecca Safier

Rebecca Safier has nearly a decade of experience writing about personal finance. Formerly a senior writer with LendingTree and Student Loan Hero, she specializes in student loans, financial aid, and personal loans. She is certified as a student loan counselor with the National Association of Certified Credit Counselors (NACCC).

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