Income-driven repayment plans were intended to help low-income student loan borrowers, and eventually cancel their debt. New documents paint a breathtaking picture of the program's failure.
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, an NPR investigation has found.
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 themIn 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.
“It is not on borrowers to be keeping two decades’ worth of records of how their student loan payments were made and whether each payment counted towards cancellation,” says Abby Shafroth, an attorney at the National Consumer Law Center , a nonprofit that has previouslyThe review’s executive summary makes clear the department had long harbored worries about its servicers breaking the promise of IDR, noting “concern regarding the accuracy of the payment counters with our servicers has been on...
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, these $0 IDR payments “that qualify for forgiveness are not adequately tracked.”“That is one of the most concerning things that you’ve highlighted because the people with the $0 payments are the folks in financial distress,” says Persis Yu of the Student Borrower Protection Center.
But, these documents show, when borrowers return to good standing and to a traditional servicer, they also lose any record of qualifying IDR payments made prior to default.
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