NOEL KING, HOST:
Now a story that affects tens of thousands of student loan borrowers. Congress expanded an effort to forgive the student loans of public servants. A new government watchdog report says 99% of those people have been denied. NPR's Cory Turner got an early look at the report.
CORY TURNER, BYLINE: If you're feeling deja vu, well, that's because this is me, on this program, about this time last year.
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TURNER: Twenty-nine thousand applications for Public Service Loan Forgiveness have been processed so far. And of those, 99% have been denied. In other words...
...Public Service Loan Forgiveness, or PSLF, began in 2007. And it seemed simple enough. Work as a nurse, firefighter, a teacher - the list is long - while paying down your federal student loans, and after 10 years, the Education Department would forgive whatever's left. Matthew and Heather Austin, who are teachers, built their future around this promise.
MATTHEW AUSTIN: I remember sitting there when we found out that Heather was pregnant with our first child and saying, OK, well, when he's 10, we can take a vacation.
TURNER: Ten because that's when Heather's student loans would finally be forgiven under PSLF. Heather, by the way, did not want to talk about what has been a long, painful odyssey for them both. See, PSLF isn't simple at all. Borrowers also have to have a certain kind of loan in a certain kind of payment plan. Last year, when Heather thought she'd met all the requirements, the Austins got the letter they'd been looking forward to.
AUSTIN: Opened it up, and my jaw just kind of dropped.
TURNER: Instead of congratulations, the letter said the Austins were still somehow 10 more years away from loan forgiveness. It turns out, Matthew says, they'd been in the wrong payment plan.
AUSTIN: I'm trying not to swear. I, (laughter), I mean, I really - this is the angriest I've been in my adult life.
TURNER: Congress heard the outcry from borrowers last year and tried to help.
BOBBY SCOTT: This wasn't a puzzle or a lottery.
TURNER: Congressman Bobby Scott is a Virginia Democrat and chairman of the House Education Committee.
SCOTT: It's just incredible that we had to, last year, pass legislation to create an emergency program.
TURNER: Congress set aside $700 million and relaxed some of those rigid requirements so more people could qualify. So for the past year, tens of thousands of borrowers, like Heather Austin, have applied for this emergency temporary fix. But NPR has obtained an audit of the program's first year by the Government Accountability Office, and here's the deja vu. GAO says, as with the original program, 99% of applications for this expansion of PSLF are also being denied.
MELISSA EMREY-ARRAS: I think we were disheartened. I think we were discouraged.
TURNER: Melissa Emrey-Arras led this new GAO investigation.
EMREY-ARRAS: And you wanted to help a lot of people. And you don't want borrowers to be confused about the eligibility criteria and to face a high denial rate. And yet, that's what we found.
TURNER: The GAO report, out today, says most denials, 71%, were because of a technicality. Borrowers who know they don't qualify for PSLF still have to apply for it so they can be rejected before they can apply for the fix. And that's exactly what's happened to Matthew and Heather Austin.
AUSTIN: What sort of Kafkaesque thing are we in here where I apply for one thing, I'm told I'm denied for this, and if I'm denied for this, I should apply for another thing and then when I get to the second thing, I'm told that I haven't been denied for the first thing? I mean, I really - I mean, I'm just cross-eyed reading these things.
TURNER: In its review, the GAO recommends that the Ed Department simplify the application process and give borrowers better information to navigate such a complicated system. For its part, the Department says it agrees with the GAO's recommendations about how to improve the programs and that a number of those efforts are already underway. Cory Turner, NPR News.