UNITED STATES
An investigation is being launched into the controversial US Student Loan Forgiveness Program after reports of repeated barriers being placed in the way of applicants who for years believed they were fulfilling all the scheme’s requirements.
The Program is supposed to cancel remaining Federal student debt after 10 years of on-time payments for people who take low-paying public sector jobs, but since the initial applicants qualified in late 2017 only a tiny fraction have had their loans forgiven.
Typical is the case of librarian Kyra Hahn, who spent three years and dozens of calls before being told her student loan payments were ineligible for the Program as she was enrolled in the wrong repayment plan — an error the company servicing the loan should have caught, but did not.
Now Ms Hahn will have to spend several more years making payments before the balance of her education loans can be cancelled.
The non-profit Student Borrower Protection Centre (SBPC) and the American Federation of Teachers are seeking the release of Government audits and correspondence to pinpoint breakdowns since the Program’s inception in 2007.
Executive Director of the SBPC, Seth Frotman (pictured) said for more than a decade, dedicated PS employees had paid a heavy price for abuse and mismanagement by the student loan industry.
“These failures have ruined student loan borrowers’ lives and can’t be swept under the rug,” Mr Frotman said.
The Program has engendered criticism and praise since being introduced by the administration of President George W. Bush.
It has been derided as a backdoor subsidy for universities and a handout for doctors and lawyers who have the earning potential to repay student loans.
The Trump Administration has proposed eliminating it, as have members of his Republican Party.
Proponents say the Program still lives up to its mission of encouraging university graduates to pursue careers in teaching, law enforcement and Government — Public Service fields that traditionally pay relatively low wages.
They argue the Program suffers from poor execution that has left thousands of borrowers confused about eligibility or frustrated with a bureaucratic process that has made securing loan forgiveness elusive for many.
To date, the Education Department has approved only 1 per cent of the more than 28,000 applications for loan forgiveness under the Program.
Washington, DC, 11 January 2019
