An investigation into a failed student loan repayment program

Our exclusive reporting has found that a federal program intended to help low-income borrowers has failed to live up to its promise. [View this email online]( [NPR Education]( April 1, 2022 This week, we looked at the income-driven repayment program and why kids aren’t back in school in Guatemala. Plus, some second-graders who helped shelter dogs find good homes. --------------------------------------------------------------- Susan Haejin Lee for NPR Happy Friday, Wait, what?! We’re coming at you two days early?! That’s because we’ve been working for a few months now on a deep-dive investigation into a cornerstone of the federal student loan program, income-driven repayment or IDR, and we thought our findings were worth a special Friday drop. Our [investigation]( has found that a federal program intended to help low-income student loan borrowers, and eventually offer them debt cancellation, has failed to live up to its promise. More than 9 million borrowers are currently enrolled in income-driven repayment (IDR) plans, which are designed to help people who cannot afford to make large monthly payments. The plans promise loan cancellation after 20-25 years. But documents obtained by NPR offer striking evidence that these plans have been badly mismanaged by loan servicers and the U.S. Department of Education. In all, these records paint a breathtaking picture of IDR's failure, and cast a shadow over the federal student loan program. While the Biden administration did not make these problems, it must now address them [as it weighs restarting repayment]( after a two-year pandemic pause. In response to NPR's request for comment, an Education Department spokesperson said on Friday, "Borrowers place their trust in us to make sure these plans work the way they were intended to, and we intend to honor that trust. We are aware of historical issues with prior processes that had undermined accurate tracking of eligible payments. The current situation is unacceptable and we are committed to addressing those issues." Here are three takeaways from NPR’s investigation, [which you can read in its entirety here](. Some servicers had no idea when borrowers qualified for forgiveness. IDR plans offer borrowers a manageable monthly payment (as low as $0) as well as loan cancellation after 20-25 years of qualifying payments. It’s the servicer’s job to count how many payments a borrower has made and then notify them when they qualify for loan cancellation. But a previously unreleased 2016 review of servicers, conducted by the Education Department’s office of Federal Student Aid, found that three servicers – PHEAA, CornerStone and MOHELA – did “not have an IDR forgiveness payment counter” to track borrowers’ progress toward cancellation. Borrowers with accounts at PHEAA, for example, would have had to request a manual count of past payments to gauge their eligibility for cancellation. This means some servicers didn’t know if borrowers qualified for cancellation unless they were asked, by borrowers, to do a labor-intensive records review. Mismanagement of IDR is especially harmful for borrowers with the lowest incomes. Under IDR, a monthly payment of $0 for a borrower earning less than 150% of the federal poverty line should still count toward loan cancellation. But in the same 2016 review, officials warned, “zero ($0.00) IDR payments that qualify for forgiveness are not adequately tracked.” Nearly half of all IDR borrowers are making $0 monthly payments, [according to a 2019 analysis by the Center for American Progress (CAP)](. Not adequately tracking those payments could delay or derail millions of the lowest-income borrowers on their way to loan cancellation. Transferring borrowers between servicers is a game of telephone. According to the documents obtained by NPR, moving borrower accounts is incredibly fraught. Borrowers’ information is transferred via what’s known as an EA27 file, and every time a file is transferred, data and context can be lost, and mistakes made. In fact, earlier versions of the EA27 didn’t even include payment counts for certain IDR plans. Now consider that nearly every borrower who could be eligible for cancellation under IDR in the next few years has had their accounts transferred at least once, when the federal government transitioned from one loan servicer to many. That means their current records, including the count of their progress toward cancellation, could be built on the sand of erroneous data. — [Cory Turner]( Correspondent, NPR Ed *** 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 coverage by [donating to your local NPR station today](. Now, let’s get into some news… Teachers fear the chilling effect of Florida's so-called 'Don't Say Gay' law. On Monday, it became Florida law, when Gov. Ron DeSantis signed the Parental Rights in Education bill. Now, Florida teachers are wondering how the new law will affect them and their students. Among its controversial measures, the law forbids instruction on sexual orientation and gender identity from kindergarten through third grade. [Read more here](. — Melissa Block, Special Correspondent and Host --------------------------------------------------------------- Newsletter continues after sponsor message --------------------------------------------------------------- China tightens restrictions and bars scholars from international conferences. The international conference was supposed to gather some of the most promising and most established Asia studies scholars from across the world in lush Honolulu. Instead, at least five Chinese scholars based in the People's Republic of China (PRC) were prevented from attending virtual events via Zoom, according to four people with direct knowledge of the matter. They said Chinese security officers and education officials directly intervened, citing education regulations published during a global coronavirus pandemic which require all Chinese scholars to receive university permission to attend any international event in-person or online. [Read more here](. — Emily Feng, NPR Beijing Correspondent A lot of kids still aren't back in school in Guatemala. Due to the pandemic, millions of students in the country have been stuck in remote learning since March 2020. The generally run-down conditions in many school buildings, which had been badly in need of repair long before the arrival of COVID-19, have government officials wary about the safety of returning to in-person learning. [Read more here](. — Miranda Mazariegos, Reflect America Fellow And before you go, some doggo love... St. Michael's Episcopal School/RACC These second-graders helped shelter pups find their fur-ever homes. Sleigh Ride is a chubby, blue-gray pitbull, and she'd been hanging around Richmond Animal Care and Control's shelter for quite awhile. But a letter from a second-grader — written on the dog's behalf — may have been the ticket home. "Do you want to adopt me?" the letter read. "You can snuggle with me! I promise that I will be a good dog. You can even sleep with me if you want!" Within about 10 days of posting the letter alongside the kennel, someone adopted Sleigh Ride into a fur-ever home, said Christie Chipps Peters, director of Richmond Animal Care and Control. The letter came from a student in Kensey Jones' writing class at St. Michael's Episcopal School in Richmond, Va. It was part of a persuasive writing assignment — Jones' brainchild — that asked students to write letters in the voice of one of 24 animals — 23 dogs and one cat — at the shelter. [Read more here](. See you next week. --------------------------------------------------------------- Listen to your local NPR station. Visit NPR.org to find your local station stream. [Listen Live]( [Facebook]( [Instagram]( [Twitter]( What do you think of today's email? We'd love to hear your thoughts, questions and feedback: [npred@npr.org](mailto:npred@npr.org?subject=Newsletter%20Feedback) Enjoying this newsletter? Forward to a friend! [They can sign up here.]( Looking for more great content? [Check out all of our newsletter offerings]( — including Music, Politics, Code Switch and more! You received this message because you're subscribed to Education emails. 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