Education Department Unveils Fix For Troubled Student Loan Forgiveness Program In its first year, the forgiveness program turned away 71% of borrowers because of a paperwork technicality. Now, the department says it's fixing that roadblock.
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Education Dept. Unveils Fix For Student Loan Program's 'Bureaucratic Nightmare'

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Education Dept. Unveils Fix For Student Loan Program's 'Bureaucratic Nightmare'

Education Dept. Unveils Fix For Student Loan Program's 'Bureaucratic Nightmare'

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And we're covering other news this morning. Some good news, actually, to report now from the world of student loans - the U.S. Department of Education has announced it wants to fix a problem that's been keeping some public servants from getting their loans forgiven. NPR's Cory Turner helped expose the problem, and he has the story here.

CORY TURNER, BYLINE: That problem left Matthew Austin speechless.

MATTHEW AUSTIN: I mean - I - it's almost a mind blank.

TURNER: I first talked with Austin last year. He and his wife, Heather, had more than $40,000 in federal student loans. Because she's a teacher and had worked for 10 years, they thought she qualified for something called Public Service Loan Forgiveness, or PSLF. But it turns out the Austins had been in the wrong repayment plan. Lucky for them, Congress created a new program, basically an offshoot of the old, to help borrowers just like them. It was called Temporary Expanded Public Service Loan Forgiveness, or TEPSLF. So the Austins applied but got denied - again.

AUSTIN: This is the angriest I've been in my adult life.

TURNER: The Austins were told they'd been denied TEPSLF...

AUSTIN: Because we had not been denied PSLF.

TURNER: If you're confused, so are the Austins. And they weren't alone. Last year, investigator Melissa Emrey-Arras with the watchdog Government Accountability Office looked into this expanded loan forgiveness program.

MELISSA EMREY-ARRAS: Over 38,000 requests were denied simply because they had not done this application for the original program that, presumably, they were not eligible for.

TURNER: Let me translate that. To qualify for this expansion of PSLF, the Austins first had to apply for the original - even though they knew they'd be rejected. But they had to do it anyway so they could be officially rejected.

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?

TURNER: Matt Austin told me late last year, I'm giving up. He just couldn't spend any more time on the phone, he said, begging the Ed Department for a clear explanation of what he'd done wrong or what he needed to do right to get their loans forgiven.

The good news is the department recently announced it wants to eliminate this paperwork doom loop. Borrowers will soon be able to apply for PSLF and the expansion with just one form. In a statement, the department said, quote, "this is just another action we're taking as part of our commitment to simplifying the program."

The GAO's Emrey-Arras calls it a great move.

EMREY-ARRAS: It's like one-stop shopping. It's better just to have a single application. And then that way, borrowers are covered either way.

TURNER: As for the Austins, when we chatted late last year, I told them about this paperwork technicality and encouraged them to try one more time. So they did. And not long after, the Ed Department finally forgave their $40,000 in loans. Matt Austin says this has lifted a huge weight off their shoulders. And now he and Heather are planning for the future.

AUSTIN: Because we can stop making payments on colleges from 12 years ago and we can start saving for college 10 years in our kids' future.

TURNER: Ideally, this fix means thousands more borrowers will finally be able to put their debts behind them and start looking ahead.

Cory Turner, NPR News, Washington.


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