AILSA CHANG, HOST:
The U.S. Department of Education said today it will provide student debt relief to more than 40,000 borrowers. These are borrowers who can no longer work because they have significant, permanent disabilities. The change is a first step towards addressing a troubled program that NPR's Cory Turner and Clare Lombardo investigated more than a year ago. Cory Turner joins us now with more details about today's development.
CORY TURNER, BYLINE: Hey, Ailsa.
CHANG: Hey. So what exactly is the Education Department promising to do here?
TURNER: So federal law has long said that the Education Department can erase the federal student loans of any borrower with significant disabilities. They just have to ask for it. It's not automatic. And then they have to complete three years of income monitoring, sending in paperwork once a year. The trick is this income monitoring really trips up a lot of people. In fact, the department revealed today, Ailsa, that just in the past year - really, over the course of this pandemic - 41,000 borrowers have had their debts given back to them, reinstated...
TURNER: ...Because they failed this income monitoring requirement. And to be clear, most are failing not because they make too much money. They're just not sending in the paperwork correctly or at all. So what the department said today is it's going to give those 41,000 borrowers basically a do-over. They're going to erase their debts again and then give them a chance to make it through this three-year income monitoring.
CHANG: Wait. Now, why is this income paperwork such an obstacle?
TURNER: Yeah, it's complicated. There are a few reasons. Some borrowers have disabilities that, frankly, make it hard for them to keep up with these requirements. There's also understandable confusion. You know, borrowers qualify for this loan relief because they have little to no income. So they think, why would I need to verify my income?
TURNER: I also, though, spoke with one borrower, Drew Lehman, who says he did his income paperwork, and he did it early. And it kept getting rejected.
DREW LEHMAN: And they wouldn't tell me what I needed to say or what I needed to do to fix it. They just kept sending it back, saying there was something wrong with it. It wasn't until almost three months into this process that someone said, this is what we need you to say.
TURNER: So, Ailsa, under this temporary change announced today, borrowers like Lehman won't have to send in their income documents during the pandemic. But they will still be part of this three-year monitoring. When I told Lehman that this morning, he said he's going to send in his paperwork anyway because he just doesn't trust the system at this point. You know, he's told me before several times that he worries about making one little mistake.
LEHMAN: And everything comes back with a vengeance because now you have all the loans plus the interest that's been building up over the top. It seems like it's purposely cruel, to be honest with you.
CHANG: Purposely cruel. Wow. I mean, yeah, I guess it is good news that the Education Department is helping these - what? - 41,000 borrowers. But did the department say what they're actually going to do to make the process easier to navigate?
TURNER: Well, aside from temporarily waiving that annual income paperwork requirement for the duration of the pandemic, not really. And for context, Ailsa, there are a lot of people right now who could be getting help but aren't. So according to the department, about 350,000 borrowers with disabilities were flagged as recently as December as potentially eligible for this loan relief. And of those - this is key - more than half of them were already in default on their loans. I spoke with Persis Yu. She's director of the Student Loan Borrower Assistance Project at the National Consumer Law Center.
PERSIS YU: This is really about a tragedy. This is about the fact that, during the pandemic, they've been reinstating the loans of borrowers with disabilities. We shouldn't be celebrating that we're undoing that terrible thing. That terrible thing should never happened in the first place.
TURNER: You know, several advocates told me the department should get rid of the income monitoring altogether and just make debt relief automatic for borrowers with disabilities. This morning on a call with the department, I asked if they were considering such a move, and I was told, quote, "We are continuing to look at what else we can do here."
CHANG: That is NPR education correspondent Cory Turner.
Thank you, Cory.
TURNER: You're welcome, Ailsa.
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