The government watchdog found that about 7,700 loans may have been eligible for forgiveness since Sept. 1, 2020, but holes in the department’s data made it difficult to definitively grant cancellation.
on repayment plans that offer debt cancellation after 20 or 25 years said Wednesday that about 7,700 loans may have been eligible for forgiveness since Sept. 1, 2020. But holes in the department’s data made it difficult to definitively grant cancellation. Only 157 loans have been forgiven as of June 2021.
“Unless Education ensures borrowers are better informed about forgiveness requirements and qualifying payment counts, [income-driven repayment] borrowers may make uninformed decisions and be unable to correct inaccurate counts, potentially delaying forgiveness,” the GAO report said.it would use one-time waivers and adjustments to retroactively credit millions of borrowers with additional payments to rectify years of administrative failures.
The GAO estimates that about 1.5 million loans held by 600,000 borrowers will meet that mark by 2030, but some of that debt may be paid in full by then or may not accrue enough qualifying payments. Servicers say they urged the department to revamp record-keeping and payment counts, which the department initially agreed to. It drafted plans between 2015 and 2017. But the initiative was shelved out of concern about the cost and complexity of manually reviewing documents for every loan in an income-driven plan.
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