RACHEL MARTIN, HOST:
An exclusive now, an NPR investigation into what's happening to hundreds of thousands of Americans with student loans and a significant permanent disability. According to U.S. federal law, these borrowers are entitled to have their student loans erased. But as NPR's Cory Turner and Clare Lombardo report, that is often not happening.
CORY TURNER, BYLINE: Denise was driving through New York City when her car was rear-ended by a large truck.
CLARE LOMBARDO, BYLINE: The impact ravaged her back and legs.
DENISE: I've basically been in pain, chronic pain, every day.
LOMBARDO: Denise asked that we not use her full name to protect her privacy.
DENISE: You know, I went from working and doing extra overtime all the time. I was called the overtime queen. Now I live on going to doctor's visits.
TURNER: Denise used her loans to help pay for a degree in psychology. But after the accident, she had to stop working and defaulted. But then on one of her many doctor's visits...
DENISE: I overheard someone in the waiting room telling someone about the discharge that you can have your student loan waivered.
TURNER: John Brooks of Georgetown University Law Center says this person Denise overheard was right.
JOHN BROOKS: Anybody who is totally and permanently disabled can have their student loan fully discharged.
LOMBARDO: The problem, says Brooks, is that the U.S. Department of Education doesn't do enough to make sure borrowers like Denise know this benefit exists.
TURNER: According to data provided to NPR by a department official, 365,000 borrowers likely qualify to have their student loans discharged because of a permanent disability. That's more than enough people to fill a city the size of Pittsburgh. And of those, nearly a quarter of a million are already in default.
LOMBARDO: NPR has also found that the vast majority of eligible borrowers won't get the hope they're entitled to. Just like Denise Drew, Lehman was badly injured in a car accident and had to stop working full time.
DREW LEHMAN: It was at a point where I couldn't, you know, do anything. I was having trouble just getting up walking.
TURNER: Drew Lehman is 48 and married with two kids. He had no idea he qualified for a discharge of his student loans until one day he was on the phone with somebody at the company that manages those loans.
LEHMAN: I got the impression that he really wasn't supposed to be telling me about it but felt sorry for me and told me about the options.
TURNER: Specifically that Lehman might qualify to have his debts erased.
LEHMAN: People don't even know about this. They don't find out about it. Nobody tells you about it.
LOMBARDO: The Ed Department tried to fix this problem a few years ago. It started identifying eligible borrowers and then mailed them letters telling them they qualified.
TURNER: But it requires borrowers to apply for help. It isn't automatic. And according to data provided by an Education Department official, since this outreach began, just over a third of eligible borrowers have even applied.
PERSIS YU: There's a lot of reasons why people don't respond to these notices.
TURNER: Persis Yu works at the National Consumer Law Center, and she says, first of all, the Department of Education has lots of outdated borrower information, including wrong addresses.
YU: So you just have an initial question about whether or not borrowers are actually receiving these notices.
TURNER: But even for borrowers who do receive them, Yu says...
YU: A lot of folks have disabilities that, frankly, prevent them from going through the process.
LOMBARDO: What's more, tens of thousands of people who do apply to have their loans discharged and get approved still don't make it through.
TURNER: That's because after borrowers get approved, they still have to send in some pretty confusing paperwork verifying their income for three straight years.
LOMBARDO: Investigators at the Government Accountability Office looked into this problem a few years back, and they took issue with how these forms were written. Here's the team lead, Allison Bawden.
ALLISON BAWDEN: We found that they did not clearly inform borrowers that failure to return that form and state their income, even if they had no income, would result in their loans being reinstated.
TURNER: The department has slowly been updating this language, but it's easy to understand why many people still would not think that they'd need to verify their income if they're not earning any income.
LOMBARDO: The problem is not turning in that form means getting failed out of the program.
BAWDEN: Tens of thousands of people who are initially approved for that discharge have their loans reinstated.
TURNER: In fact, NPR has learned that 44,000 borrowers who had been initially approved to have their loans erased got kicked out of the program, largely because they didn't meet this extra paperwork requirement.
LOMBARDO: They're all back in debt. Not only that, earlier this year, the department told Congress it had discharged the loans of 40% of eligible borrowers.
TURNER: But new data obtained by NPR from a department official show the real number is much lower. Over the past three years, only 28% of eligible borrowers with disabilities have either had their loans erased or are on track for that to happen.
CHRIS COONS: I just don't understand why the Department of Education continues to fail to make good on this opportunity to make a lasting difference in the lives of Americans who've already suffered enough.
TURNER: That's Senator Chris Coons, a Delaware Democrat. He's one of a bipartisan group of lawmakers who wrote to Education Secretary Betsy DeVos urging her to make this loan discharge for borrowers with disabilities automatic.
COONS: The Department of Education simply needs to match up Social Security numbers and full names and send a notice of discharge rather than making folks jump through another hoop and another layer bureaucratic red tape.
LOMBARDO: Several experts we spoke with said the income verification requirement is one hoop that needs to go. They said it doesn't prevent fraud like it was intended to. It just makes things harder for borrowers like Drew Lehman.
LEHMAN: I'm now the criminal. I'm now the one that has to be treated like I'm trying to defraud the system when I've done everything I was supposed to.
TURNER: It's been years since the car accident that left Drew Lehman unable to work. And now he and Denise and thousands of other borrowers like them are trying to make it through three years of income verification. It is the last step in a long process that Lehman says has left him tired and frustrated.
LEHMAN: The anxiety, depression, the burden that I face with my family, all because of something that wasn't my fault.
LOMBARDO: For now, Lehman says, he'll be watching the mail, making sure he doesn't miss an important form that could once again leave him saddled with debt. For NPR News, I'm Clare Lombardo.
TURNER: And I'm Cory Turner.
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MARTIN: We want to note that NPR has reached out to the Education Department for their response. An official says, quote, "we continue to look for ways to make the process easier to navigate for disabled student loan borrowers while maintaining the integrity of the taxpayers' dollars associated with the discharges."
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