As borrowers resume student loan payments, here are 5 stories : NPR

As borrowers resume student loan payments, here are 5 stories : NPR
As borrowers resume student loan payments, here are 5 stories : NPR
Five people, five different stories.

Twenty-eight million Americans must now do what they haven’t had to do for more than three years: pay their federal student loans. Borrowers have endured a remarkable, chaotic run — beginning in August 2022 with President Biden’s ill-fated plan to forgive at least $10,000 per borrower and culminating in October 2023 with the resumption of monthly bills.

During that time, we’ve heard from hundreds of borrowers who’ve shared their stories of struggle and confusion, patience and relief.

Now, all those divergent stories, millions of threads in a national patchwork, converge with this unprecedented return to repayment: Sofie must make her first payment ever, while Kurt tends a spreadsheet that says he’s been in repayment for nearly 20 years. Carlos is hoping he can get into a new repayment plan so the loans he took out to help his children don’t haunt him through retirement. Juan Carlos is fighting to emerge from the shadow of default. Phoema — suddenly, shockingly — has no loans to repay.

This is the return to repayment, in the voices of a handful of borrowers we met this year, reported by Cory Turner and illustrated by LA Johnson.

The first-time borrower

Text: Sofie graduated from Baylor University in 2020, not long after the pandemic payment pause began. Earlier this year, she said she feared the return to repayment. Quote: "It's a combination of feeling anxious about it and feeling completely nihilistic about it."

Text: Sofie has been stretching her modest income as a freelance journalist to repay her private loans. Now, though, she has to repay her federal loans, too. Quote: "A lot of my income now goes towards student loans — like, hundreds of dollars. So thinking about how that would potentially double is really overwhelming."

Text: Sofie recently applied for the new SAVE income-based repayment plan. At first, she says, she was quoted an unaffordable monthly payment based on her salary from a past job. Quote: "I uploaded my pay stubs from my freelance [work], and they were like, 'OK, just kidding. You pay zero dollars.' "

According to federal data, nearly 3 million borrowers now enrolled in the SAVE plan have incomes low enough that they have qualified for an official, $0 monthly payment.

The longtime borrower

Text: Kurt taught high school in Miami before moving to Germany, where he works as a copywriter. He has been repaying his undergraduate loans for two decades. We've spoken many times over the past year, and made a spreadsheet of all his payments – more than 230!

Text: We wanted to manually count Kurt's payments because, under a new federal overhaul, borrowers who have been in repayment for 20 years (240 payments) can qualify to have their remaining debts erased. Kurt is very close. QUOTES: Cory: "Well, according to this, your last payment will be sometime in March."Kurt: "My birthday month. Happy birthday to me."

Text: Turns out, he was even closer than we thought. A few weeks ago, he was up early with his infant daughter, when he received an email, telling him he is now eligible to have his remaining $18,000 in loans erased. Quote: "So I check my email, and as soon as I saw the subject, I thought, 'Oh my God, this is it!'"

This overhaul, known as the income-driven repayment “one-time account adjustment,” has so far erased nearly $44 billion in student loan debts for more than 900,000 borrowers.

Public Service Loan Forgiveness

As one of its earliest student loan efforts, the Biden administration overhauled the troubled Public Service Loan Forgiveness program, which promised loan forgiveness for borrowers who made loan payments for 10 years while working in a qualified public service.

Text: Phoema earned her master's from Ole Miss and loves her job as a school-based speech-language pathologist. Quote: "The first time you hear a child say something that they've never said before or the first time a child says, 'Mama,'... You know, it's special."

Text: When Phoema struggled with her payments, she didn't know she could enroll in an income-based plan. Instead, her loan servicer put her loans into forbearance, allowing interest to grow. She remembers being told: Quote: 'If you're not going to make that full payment every month, then you might as well just put them into forbearance.'

Text: Now, the time Phoema spent in forbearance counts toward PSLF's 10-year requirement. Earlier this year, she called her servicer, and a call center worker said Phoema's loans had been forgiven. Quote: "I immediately just burst into tears... She said, 'You've worked so hard to help other people, and now is our time to help you.

Phoema is one of nearly 750,000 public workers who have received $53.5 billion in debt relief through PSLF.

The pathway out of default

According to the Department of Education, nearly 7 million federal student loan borrowers are in default. To help them, it’s rolling out a new program to make returning to repayment easier.

Juan Carlos is a public school teacher and father of three. He defaulted on his federal student loans after the Great Recession. It ruined his credit, and made buying a car and even renting an apartment difficult. Quote:  "My wife and I had separated, so I had to get an apartment on my own. And I had to have a co-signer to get this little, bitty studio apartment."

Text: A new Biden administration program, called Fresh Start, allowed Juan Carlos to qualify for a more flexible repayment plan. He got help after spending just a few minutes online and soon will begin repaying his student loans.  Quote: "On my credit report, it now lists my student loans as in good standing, which made an enormous difference."

Text: The Education Department says more than 300,000 borrowers have opted into Fresh Start so far, though that's a small fraction of the nearly 7 million borrowers languishing in default. Quote: "The idea that I could walk around every day without this oppressive, heavy feeling of shame on me all the time — I thought it was never going to happen."

The Parent PLUS loan trap

Text: Carlos and his wife saved to send their three children to college, but, around the time their oldest enrolled in the University of Texas, Carlos was laid off. They took out Parent PLUS loans to fill the gap. Quote: "I told my kids, they had to go to college to get a seat at the table."

Text: Parent PLUS loans come with an unusually high interest rate – 8.05% – and don't qualify for the more generous, income-based repayment plans. Quote: "The amount that they said I will have to repay is just under $2,000 a month. That just is extraordinary to me. I'm not sure I can handle that."

Text: But a loophole in federal policy could allow Carlos to qualify for a more flexible repayment plan, with a much lower monthly payment, if he consolidates his Parent Plus loans twice. Quote: "Despite this massive debt, it's still the best investment ... I just hope I can pay them off before I die."

Navigating this double-consolidation loophole is tedious, at best, and requires complicated paperwork. Neither the U.S. Department of Education nor its loan servicers will discuss the loophole or how to squeeze through it. You can find help here.