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Thousands of borrowers' student debt is erased with loan forgiveness program overhaul

AILSA CHANG, HOST:

In recent days, thousands of federal student loan borrowers have gotten a shock. When they go online to check their loan balances, they realize, suddenly, they are debt-free. This wave of loan discharges is part of the U.S. Department of Education's overhaul of the Public Service Loan Forgiveness program. NPR's Cory Turner reports.

CORY TURNER, BYLINE: When Congress created PSLF left back in 2007, it was to encourage people like Nathan Harig to work in public service.

NATHAN HARIG: Auto accidents, sudden cardiac arrests, especially - that's one of my specialties.

TURNER: Harig has been a paramedic in Pennsylvania for more than 10 years and had been paying nearly $500 a month toward his student loans. And that was the deal. After 10 years of service, the U.S. government promised to forgive the rest. But in reality, the program's been a mess, with poor communication and paperwork mistakes leading to borrowers not getting credit for all of the time they actually served. Ginnie Dressler, a librarian in Ohio, compares it to being a lifelong fan of the hapless Cleveland Browns football team.

GINNIE DRESSLER: Every season, this is going to be the winner. That's how I felt every year putting in my certification and knowing that there's probably going to be some disappointment at the end (laughter).

TURNER: Dressler's laughing because the Ed Department is now making it easier to qualify for forgiveness. Last week, when she went online to check her loan balance...

DRESSLER: Complete disbelief. Complete disbelief.

TURNER: Overnight, Dressler's student loan debt went from more than $40,000 to...

DRESSLER: Zero interest, zero due - and I was like, wow. I think I took at least two screenshots just in case something happened to the one. It was like, I have this.

TURNER: Nathan Harig, the paramedic, has a similar story.

HARIG: I logged in, and I saw zero. And of course, anywhere you click to try to get to your account, it just fails. You get an error message.

TURNER: There was no ceremonial email at first, but his $19,000 debt was gone - perfect timing with a 2-month-old at home.

HARIG: It's just one of those things that the burden is off.

TURNER: The news was also well-timed for Jason Porta, who got the news right before a preplanned vacation.

JASON PORTA: I am riding through the Smokies with some of my best friends on vacation to Dollywood.

TURNER: Porta works for the Pennsylvania state government and had about $20,000 in loans erased.

PORTA: Absolutely amazing - I can't tell you how I spread my joy, like, through the rafters at work.

ALICIA ROSENBAUM: Until I got the letter today that said congratulations, I still didn't believe it, even though my account said zero.

TURNER: Alicia Rosenbaum is a high school English teacher in Georgia. She just got credit for more than seven years of teaching that had been disqualified. And that's why when she reads the official letter that did finally arrive, she tears up.

ROSENBAUM: We have determined that you have successfully made the required 120 monthly payments. You have satisfied your obligation, and no additional payments are required on these loans.

TURNER: Rosenbaum is one of roughly 30,000 public service workers who will be getting notices soon, according to the Ed Department, shedding some $2 billion in debt. Some, including Ginnie Dressler, will even get a refund, and she'll use it to help her young twins avoid college loans someday.

DRESSLER: I don't wish that for my children - you know, this loan debt over their life for, you know, a good chunk of their adult life.

TURNER: Now, she laughs, if only the Ed Department could fix her beloved Cleveland Browns. Cory Turner, NPR News.

(SOUNDBITE OF RUDY RAW AND TOM DOOLIE SONG, "RIGHT HERE") Transcript provided by NPR, Copyright NPR.