July 26, 2001
                                                                              Volume 2001 - Issue 39

 

Spousal Consolidation Loans

    The Utah Higher Education Assistance Authority (UHEAA) has recently revised its policy concerning spousal consolidation loans.  Spousal loans are authorized in the Federal Family Education Loan Program (FFELP).  However, UHEAA has decided to discontinue making or guaranteeing such loans, effective July 1, 2001, to protect the best interests of our borrowers.  Examples of circumstances which may occur with a spousal consolidation loan include the following:

In the event of a death or disability of a spouse, there is no forgiveness of the balance of the combined loan amount.  The surviving or able spouse remains responsible for the entire loan balance.

In the event of a divorce, both spouses remain legally responsible for the entire loan balance, regardless of the terms of the Divorce Decree.

    Spouses can still take out individual consolidation loans, thus avoiding the risks of a combined loan.  As an alternative to a consolidation loan, certain high balance borrowers may qualify for an extended repayment period of up to 25 years on their Federal Stafford or PLUS loans.  Details concerning extended repayment options may be found in section 7.6.D. of the Common Manual.

    For more details on consolidation loans and UHEAA borrower benefits, see UHEAA's web site at http://www.uheaa.org/.  For additional information on applying for a UHEAA consolidation loan, contact UHEAA's servicer, UNIPAC, toll free at 1-888-486-4722.