Exclusive: How the student loan safety net has failed low-income borrowers
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.
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 also 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.
NPR obtained two-dozen pages of internal department documents, including emails and, most notably, a previously unreported, 2016 review of student loan servicers' struggles to implement IDR. The documents shed new light on the 2021 revelation that, at the time, 4.4 million borrowers had been repaying for at least 20 years but only 32 had had loans canceled under IDR.
The documents also offer surprising new revelations. For example, some servicers weren't clearly tracking IDR payments and did not know when borrowers qualified for cancellation.
In all, these records paint a breathtaking picture of IDR's failure, and cast a shadow after a two-year pandemic pause.
