Borrowers learn student loans could be forgiven earlier than expected Thousands of teachers, nurses and other public servants are learning they could have some of their federal student loan debts erased months — and even years — earlier than expected.

Student loan forgiveness is a lot closer for some borrowers, and they are pumped

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SARAH MCCAMMON, HOST:

The U.S. Department of Education has begun sending emails to thousands of teachers, nurses and other public servants, letting them know they could soon have some of their federal student loan debts erased. That's because the department is giving those borrowers a waiver from some of the toughest rules in a program known as Public Service Loan Forgiveness. NPR's Cory Turner has covered the program's troubles for years, and he checked in with two borrowers who now hope to benefit.

CORY TURNER, BYLINE: When Victoria Chamberlin heard the news, it hit her - this could mean the end of her $70,000 in student debt. The U.S. Army veteran says she and her husband were cautiously elated.

VICTORIA CHAMBERLIN: By the time our baby is three, both of us will be student loan debt-free, and that's just, like, unbelievable. We never thought it would be possible.

TURNER: Zahra Nealy was listening to NPR one morning when she heard the news about the waiver that would likely help her, too.

ZAHRA NEALY: I was so excited when I heard your story in the shower. Made sure I didn't slip, so - (laughter).

TURNER: To appreciate the excitement and relief of borrowers, you have to understand how a program that was meant to do so much good ended up causing so much pain. The Public Service Loan Forgiveness Program, or PSLF, began in 2007 to encourage borrowers to work in public service. But the rules were strict and badly communicated by the Ed Department to the companies that manage student loans. And then those companies spent years mismanaging the program and misinforming borrowers.

CHAMBERLIN: I don't have, like, a heartbreaking case where I was in the wrong payment plan or my payment was off by a penny. I did everything exactly right.

TURNER: Still, Victoria Chamberlin ran afoul of the program after she and her husband enlisted in the army. Several times when they recertified their incomes as the program requires, she says the company managing their loans erroneously increased their monthly payments.

CHAMBERLIN: And then we would have to go into forbearance while they figured it out because we were both active duty and, like, couldn't afford it.

TURNER: And this constant back and forth, Chamberlin says - getting the payments corrected and then restarted - was exhausting; especially having to do it from military bases in Germany and South Korea.

CHAMBERLIN: I'd have to, like, go to the base and use the secure phone and - that you can call the states with but you're, like, not supposed to use for personal reasons. It's just been awful.

TURNER: These stories of administrative problems with PSLF are legion and a big reason the education department is giving borrowers retroactive waivers from some of its toughest rules. Borrowers who were disqualified for being in the wrong repayment plan or for having the wrong kind of loan can now get credit for past payments. The department just told Victoria Chamberlin she should get credit for the year she spent paying down the wrong kind of loan. Plus, she should get credit for the months her payments were paused while she was on active duty. Chamberlin, who now works for a private company, says she served more than enough time to qualify for forgiveness.

CHAMBERLIN: It sounds dramatic, but, like, if my loans can actually get forgiven, like, I won't have to leave the job that I really like.

TURNER: Zahra Nealy has spent nearly a decade working for nonprofits in Southern California, and like Chamberlin, also had a paperwork problem. But she got it sorted out and is back on track.

NEALY: I am nine payments away from being eligible for loan forgiveness.

TURNER: That's less than a year away from having roughly half her student debts erased. See, she's always had two buckets of loans - half that qualify for PSLF and half that don't. That's roughly $140,000 total. Now, because of the Ed Department loosening its rules, potentially all of Nealy's loans could be eligible and erased within a year.

NEALY: Which would be huge (laughter).

TURNER: Nealy says because of her debts, homeownership has felt unattainable. But soon, maybe not. And this news has her feeling something she's not used to feeling about her student debts.

NEALY: Hope. It's really hope in a desperate time.

TURNER: The Ed Department estimates that this overhaul could erase the student debts of nearly 50,000 public service workers and help half a million more get closer to the loan forgiveness they were promised.

Cory Turner, NPR News.

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