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A Bipartisan bill could fix decades-old student loan problem for divorced Americans

Yahoo Finance's Aarthi Swaminathan breaks down how a bill with bipartisian support could solve studen loan issues for divorced couples.

Video Transcript

ADAM SHAPIRO: But we're going to turn our attention right now to a solution to a decades old student loan problem. Aarthi Swaminathan is joining us now with more on that. Aarthi.

AARTHI SWAMINATHAN: Hey, Adam, Seana. So, back in the '90s, we were, again, dealing with the student loan default rates that were pretty high, like more than 10%. So Congress created basically this High Education Act that allowed married couples to consolidate their loan, but left no room for them to unbundle these loans. So for 20, 30 years, a lot of married couples have been-- and many of them divorced and they were struggling with this because having to deal with your ex-wife and your ex-husband on a daily basis regarding your student loans, like, that was really unpleasant.

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And so we've been following the story. We heard from a number of borrowers. And we're seeing obviously during the pandemic, there has been a payment pause. But that frustration continues to bubble up. And it's going to come to a head when the payment pause expires. So, as a result, a couple of Congress members have decided to introduce a new bill to help these borrowers unbundle these loans. And they just reintroduced that bill. They first introduced it in 2019, reintroducing it now. And we'll see whether that actually takes into effect and give a lifeline for these borrowers.

SEANA SMITH: Aarthi, does this have bipartisan support?

AARTHI SWAMINATHAN: Yes, so that's-- on student loan issues, not many issues have bipartisan support, but this one does. I believe Senator Cornyn has signed on, Senator Rubio has signed on. Sorry, I'm mixing up a bunch of names. But it has bipartisan support because of the issue-- issue is that these people are willing to pay the loans. It's just that they don't want to pay the loans with someone else. So that's why this has garnered more support than something like cancellation or some of the more progressive proposals. So that's why I'm expecting this to at least make some moves. But we still have to pass the bill and then wait for education to make the changes. So it could be quite a long time.

ADAM SHAPIRO: Aarthi, thank you for that up--