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Top student loan official testifies on troubled loan forgiveness program

SARAH MCCAMMON, HOST:

A quick update now on new changes to the troubled public service loan forgiveness program and what borrowers should know. Richard Cordray heads the Office of Federal Student Aid. He spoke before a House subcommittee today, and he addressed concerns about how those changes have been rolled out. NPR's Cory Turner reports.

CORY TURNER, BYLINE: Earlier this month, the Biden administration announced it is overhauling PSLF. The 2007 program promised federal student loan forgiveness for borrowers who work 10 years in public service. But its poor management left many borrowers in the cold. Today, Cordray said the overhaul is game-changing for hundreds of thousands of borrowers, while acknowledging...

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RICHARD CORDRAY: There's an awful lot of work to do to make that announcement into reality.

TURNER: One challenge - the U.S. government doesn't directly manage student loans. It pays loan servicers to do that. Democratic Congressman Joe Courtney of Connecticut told Cordray he's worried that these servicers aren't prepared for the big changes.

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JOE COURTNEY: We're already hearing from constituents that servicers who are getting calls - because, I mean, this is something people are watching like a hawk, you know, back home - are already being told they're not - they don't have the guidance to implement the PSLF changes.

TURNER: Borrowers shared similar stories with NPR. Several say they called their servicers, believing they now qualify, and asked, what do I need to do? But they were told, we don't know yet. One borrower says her servicer was about as useless as a chocolate teapot. Cordray admitted to lawmakers...

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CORDRAY: We've heard some of the same things you've heard, and we want to get these things sorted out as quickly as possible.

TURNER: Cordray also urged patience, saying it is unrealistic to expect changes this big to happen overnight. But they will happen, he said. Cory Turner, NPR News.

(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.

Cory Turner reports and edits for the NPR Ed team. He's helped lead several of the team's signature reporting projects, including "The Truth About America's Graduation Rate" (2015), the groundbreaking "School Money" series (2016), "Raising Kings: A Year Of Love And Struggle At Ron Brown College Prep" (2017), and the NPR Life Kit parenting podcast with Sesame Workshop (2019). His year-long investigation with NPR's Chris Arnold, "The Trouble With TEACH Grants" (2018), led the U.S. Department of Education to change the rules of a troubled federal grant program that had unfairly hurt thousands of teachers.