Student loan borrowers will get help after an NPR report and years of complaints

Student loan borrowers will get help after an NPR report and years of complaints

Transcript¹

The U.S. Department of Education says it will retroactively help millions of federal student loan borrowers who have been hurt and held back by its troubled income-driven repayment² (IDR) plans, calling the plans' longstanding flaws and mismanagement "inexcusable."

Tuesday's announcement comes after years of complaints and lawsuits³ and, most recently, an NPR investigation⁴ that revealed that these IDR plans, which promise affordable⁵ monthly payments as low as $0 and loan forgiveness after 20-25 years, have been badly mismanaged by the department and the loan servicing companies it employs.

"Today, the Department of Education will begin to remedy years of administrative⁶ failures that effectively denied the promise of loan forgiveness to certain borrowers enrolled⁷ in IDR plans," U.S. Education Secretary Miguel Cardona said in a statement.

The department estimates that the changes will result in immediate⁸ debt cancellation⁹ for at least 40,000 borrowers who will now qualify for Public Service Loan Forgiveness. In addition, several thousand borrowers will now qualify for debt cancellation under IDR.

This follows a 2021 revelation that, at the time, 4.4 million borrowers had been repaying their loans for at least 20 years but only 32 had had debts canceled under IDR.

As a result of Tuesday's news, millions more borrowers will also receive months and, in some cases, years of new credit toward eventual¹⁰ cancellation.

Here's what the department is committing to do:

Borrowers with long-term forbearances will get credit toward debt cancellation

The department and its office of Federal Student Aid (FSA) pledge to conduct a "one-time account adjustment" to give borrowers credit for time spent in what it considers unjustifiably long forbearances: more than 12 consecutive¹¹ months or more than 36 cumulative¹² months.

Forbearance allows borrowers in financial trouble to pause their payments, but interest continues to accrue¹³ and capitalize, meaning the interest itself ends up accruing¹⁴ interest. Income-driven repayment plans can offer the same, or nearly the same, reprieve¹⁵ from high monthly payments, and, unlike forbearance, they give borrowers a path toward loan cancellation.

After July 2009 when IDR plans became widely available, forbearance should have been loan servicers' tool of last resort for distressed¹⁶ borrowers. Instead, the department says, a new review found that servicers' use of long-term forbearance was "remarkably¹⁷ widespread."

According to the department, between July 2009 and March 2020, more than 13% of all Direct Loan borrowers were in forbearance for at least 36 months, suggesting "loan servicers placed borrowers into forbearance in violation¹⁸ of Department rules, even when their monthly payment under an IDR plan could have been as low as zero dollars." The department generally limits forbearance to 12 consecutive months or three years total, after which payments should resume.

The department's remedy means that borrowers will be given credit toward loan cancellation for some of these long-term forbearances. For example, a borrower who spent 16 consecutive months in forbearance would be given credit for 16 qualifying payments toward cancellation.

The department estimates that 3.6 million borrowers will receive at least three years of new credit toward cancellation. Many more borrowers will benefit but receive less than that.

The plan excludes one prominent group of borrowers: those who spent less than 12 consecutive months and less than 36 cumulative months in forbearance, though it does promise an "account review" for those who choose to file a complaint with FSA's ombudsman.

Inaccuracies in how qualifying payments were counted will be corrected

NPR reporting earlier this month revealed pervasive¹⁹ inaccuracies in loan servicers' counts of borrowers' qualifying IDR payments, which the department now acknowledges and pledges to address with a one-time revision of past payments.

"Any months in which borrowers made payments will count toward IDR, regardless of repayment plan," the department's release says. "Payments made prior to consolidation²⁰ on consolidated²¹ loans will also count. This fix is necessary to correct for data problems and past implementation²² inaccuracies."

After acquiring internal department documents, NPR found a litany of irregularities in how loan servicers were counting — or failing to count — qualifying IDR payments, thereby²³ delaying borrowers' progress toward forgiveness. For example, $0 monthly payments were not being adequately tracked, potentially hurting the lowest-income borrowers. Also, borrowers appeared to erroneously lose credit for previous progress made toward IDR after emerging from default.

Improving the way borrowers' progress toward loan cancellation gets tracked

The department is offering two remedies for another serious problem highlighted in NPR's recent investigation — that loan servicers weren't uniformly tracking borrowers' progress toward loan cancellation, and some weren't tracking their progress at all.

FSA now says it will issue new guidance to servicers to make sure the companies' records are accurate and uniform. Perhaps more importantly, the department says in 2023 it will begin tracking IDR payments on its own system and displaying borrowers' progress at StudentAid.gov.

These changes will happen automatically — but it may take awhile

The department says it will make these adjustments to borrower records automatically, but first it will need to upgrade its antiquated²⁴ National Student Loan Data System (NSLDS). As such, loan cancellations won't officially begin until fall of this year.

The overhaul²⁵ comes amid mounting political pressure

The department unveiled its overhaul plans amid mounting pressure from lawmakers.

On Monday, citing NPR's reporting, the chairs of both House and Senate education committees, Rep. Bobby Scott, D-Va., and Sen. Patty Murray, D-Wash., urged Education Secretary Miguel Cardona in a letter to "provide immediate relief and undo²⁶ past harms."

"Borrowers have for too long, lived with ballooning debts and the false promise of loan forgiveness after 20 or 25 years in income-driven repayment," the letter said. "Payments must be corrected retroactively in order to provide relief to borrowers who have already been harmed by this broken safety net."

While the department's proposal addresses some of Scott's and Murray's demands, it falls short in at least one area. The top Democrats²⁷ implored²⁸ the department to retroactively give borrowers credit toward loan cancellation for all past periods of forbearance, not just long-term pauses.

In a statement, Scott said "today's announcement means that borrowers in Income-Driven Repayment will finally have reliable access to the loan forgiveness that they were promised and have been working toward... However, while the Department has taken a significant step to support borrowers, we know we must do more to fix our broken student loan system, including the Income-Driven Repayment program."

Last week, leading Senate Democrats, Sen. Sherrod Brown of Ohio, Sen. Elizabeth Warren of Massachusetts and Sen. Dick Durbin of Illinois, also sent a letter to Consumer Financial Protection Bureau Director Rohit Chopra, calling for his agency to investigate and "use all of its authorities to ensure borrowers are accessing IDR program benefits and receive the student loan forgiveness they have earned."

The department's announcement also comes not long before the U.S. Government Accountability Office is expected to release the results of its own investigation into IDR's failures.

NPR is committed to reporting on pressing issues that matter to you, like student loans. Sign up for our Education newsletter to stay up to date. You can support NPR's trusted, vital coverage²⁹ by donating to your local NPR station today.

1 transcript   

n.抄本，誊本，副本，肄业证书

参考例句：

• A transcript of the tapes was presented as evidence in court.一份录音带的文字本作为证据被呈交法庭。
• They wouldn't let me have a transcript of the interview.他们拒绝给我一份采访的文字整理稿。

2 repayment   

n.偿还，偿还款；报酬

参考例句：

• I am entitled to a repayment for the damaged goods.我有权利索取货物损坏赔偿金。
• The tax authorities have been harrying her for repayment.税务局一直在催她补交税款。

3 lawsuits   

n.诉讼( lawsuit的名词复数 )

参考例句：

• Lawsuits involving property rights and farming and grazing rights increased markedly. 涉及财产权，耕作与放牧权的诉讼案件显著地增加。 来自辞典例句
• I've lost and won more lawsuits than any man in England. 全英国的人算我官司打得最多，赢的也多，输的也多。 来自辞典例句

4 investigation   

n.调查，调查研究

参考例句：

• In an investigation,a new fact became known, which told against him.在调查中新发现了一件对他不利的事实。
• He drew the conclusion by building on his own investigation.他根据自己的调查研究作出结论。

5 affordable   

adj.支付得起的，不太昂贵的

参考例句：

• The rent for the four-roomed house is affordable.四居室房屋的房租付得起。
• There are few affordable apartments in big cities.在大城市中没有几所公寓是便宜的。

6 administrative   

adj.行政的，管理的

参考例句：

• The administrative burden must be lifted from local government.必须解除地方政府的行政负担。
• He regarded all these administrative details as beneath his notice.他认为行政管理上的这些琐事都不值一顾。

7 enrolled   

adj.入学登记了的v.[亦作enrol]( enroll的过去式和过去分词 )；登记，招收，使入伍（或入会、入学等），参加，成为成员；记入名册；卷起，包起

参考例句：

• They have been studying hard from the moment they enrolled. 从入学时起，他们就一直努力学习。 来自《简明英汉词典》
• He enrolled with an employment agency for a teaching position. 他在职业介绍所登了记以谋求一个教师的职位。 来自《简明英汉词典》

8 immediate   

adj.立即的；直接的，最接近的；紧靠的

参考例句：

• His immediate neighbours felt it their duty to call.他的近邻认为他们有责任去拜访。
• We declared ourselves for the immediate convocation of the meeting.我们主张立即召开这个会议。

9 cancellation   

n.删除，取消

参考例句：

• Heavy seas can cause cancellation of ferry services.海上风浪太大，可能须要取消渡轮服务。
• Her cancellation of her trip to Paris upset our plan.她取消了巴黎之行打乱了我们的计划。

10 eventual   

adj.最后的，结局的，最终的

参考例句：

• Several schools face eventual closure.几所学校面临最终关闭。
• Both parties expressed optimism about an eventual solution.双方对问题的最终解决都表示乐观。

11 consecutive   

adj.连续的，联贯的，始终一贯的

参考例句：

• It has rained for four consecutive days.已连续下了四天雨。
• The policy of our Party is consecutive.我党的政策始终如一。

12 cumulative   

adj.累积的，渐增的

参考例句：

• This drug has a cumulative effect.这种药有渐增的效力。
• The benefits from eating fish are cumulative.吃鱼的好处要长期才能显现。

13 accrue   

v.(利息等)增大，增多

参考例句：

• Ability to think will accrue to you from good habits of study.思考能力将因良好的学习习惯而自然增强。
• Money deposited in banks will accrue to us with interest.钱存在银行，利息自生。

14 accruing   

v.增加( accrue的现在分词 )；（通过自然增长）产生；获得；（使钱款、债务）积累

参考例句：

• economic benefits accruing to the country from tourism 旅游业为该国带来的经济效益
• The accruing on a security since the previous coupon date. 指证券自上次付息日以来所累积的利息。 来自互联网

15 reprieve   

n.暂缓执行（死刑）；v.缓期执行；给…带来缓解

参考例句：

• He was saved from the gallows by a lastminute reprieve.最后一刻的缓刑令把他从绞架上解救了下来。
• The railway line, due for closure, has been granted a six-month reprieve.本应停运的铁路线获准多运行6 个月。

16 distressed   

痛苦的

参考例句：

• He was too distressed and confused to answer their questions. 他非常苦恼而困惑，无法回答他们的问题。
• The news of his death distressed us greatly. 他逝世的消息使我们极为悲痛。

17 remarkably   

ad.不同寻常地，相当地

参考例句：

• I thought she was remarkably restrained in the circumstances. 我认为她在那种情况下非常克制。
• He made a remarkably swift recovery. 他康复得相当快。

18 violation   

n.违反(行为)，违背(行为)，侵犯

参考例句：

• He roared that was a violation of the rules.他大声说，那是违反规则的。
• He was fined 200 dollars for violation of traffic regulation.他因违反交通规则被罚款200美元。

19 pervasive   

adj.普遍的；遍布的，(到处)弥漫的；渗透性的

参考例句：

• It is the most pervasive compound on earth.它是地球上最普遍的化合物。
• The adverse health effects of car exhaust are pervasive and difficult to measure.汽车尾气对人类健康所构成的有害影响是普遍的，并且难以估算。

20 consolidation   

n.合并,巩固

参考例句：

• The denser population necessitates closer consolidation both for internal and external action. 住得日益稠密的居民，对内和对外都不得不更紧密地团结起来。 来自英汉非文学 - 家庭、私有制和国家的起源
• The state ensures the consolidation and growth of the state economy. 国家保障国营经济的巩固和发展。 来自汉英非文学 - 中国宪法

21 consolidated   

a.联合的

参考例句：

• With this new movie he has consolidated his position as the country's leading director. 他新执导的影片巩固了他作为全国最佳导演的地位。
• Those two banks have consolidated and formed a single large bank. 那两家银行已合并成一家大银行。

22 implementation   

n.实施，贯彻

参考例句：

• Implementation of the program is now well underway.这一项目的实施现在行情看好。

23 thereby   

adv.因此，从而

参考例句：

• I have never been to that city,,ereby I don't know much about it.我从未去过那座城市，因此对它不怎么熟悉。
• He became a British citizen,thereby gaining the right to vote.他成了英国公民，因而得到了投票权。

24 antiquated   

adj.陈旧的，过时的

参考例句：

• Many factories are so antiquated they are not worth saving.很多工厂过于陈旧落后，已不值得挽救。
• A train of antiquated coaches was waiting for us at the siding.一列陈旧的火车在侧线上等着我们。

25 overhaul   

v./n.大修，仔细检查

参考例句：

• Master Worker Wang is responsible for the overhaul of this grinder.王师傅主修这台磨床。
• It is generally appreciated that the rail network needs a complete overhaul.众所周知，铁路系统需要大检修。

26 undo   

vt.解开，松开；取消，撤销

参考例句：

• His pride will undo him some day.他的傲慢总有一天会毁了他。
• I managed secretly to undo a corner of the parcel.我悄悄地设法解开了包裹的一角。

27 democrats   

n.民主主义者，民主人士( democrat的名词复数 )

参考例句：

• The Democrats held a pep rally on Capitol Hill yesterday. 民主党昨天在国会山召开了竞选誓师大会。
• The democrats organize a filibuster in the senate. 民主党党员组织了阻挠议事。 来自《简明英汉词典》

28 implored   

恳求或乞求（某人）( implore的过去式和过去分词 )

参考例句：

• She implored him to stay. 她恳求他留下。
• She implored him with tears in her eyes to forgive her. 她含泪哀求他原谅她。

29 coverage   

n.报导，保险范围，保险额，范围，覆盖

参考例句：

• There's little coverage of foreign news in the newspaper.报纸上几乎没有国外新闻报道。
• This is an insurance policy with extensive coverage.这是一项承保范围广泛的保险。