Marlon and his dog, George.
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Since 1988, Marlon Fox has been paying down his federal student debt.
He didn’t see an end in sight. Then, on Aug. 25, 2023, an email popped up in his inbox with the subject line: “Your student loans have been forgiven!”
His $119,500 balance was reset to zero.
“I couldn’t believe it,” said Fox, 65, a chiropractor in North Charleston, South Carolina. “I’d been battling this for so long. I’ve been on cloud nine ever since.”
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Why some borrowers are in repayment for decades
After the Supreme Court blocked the Biden administration’s sweeping student loan forgiveness plan last June, it has explored all of its existing authority to leave people with less education debt. One of those strategies has been to take another look at the accounts of borrowers who have been in repayment for decades. Such stories are not uncommon.
Under the U.S. Department of Education’s income-driven repayment plans, student loan borrowers are entitled to get any of their remaining debt forgiven after 20 years or 25 years.
Yet many have not seen that promised relief.
“This is due, in part, to strong financial disincentives for student loan servicers to inform consumers about the program and their ability to qualify for it,” said Nadine Chabrier, a senior policy and litigation counsel at the Center for Responsible Lending.
The Education Department contracts with different companies to service its federal student loans, including Mohela, Nelnet and EdFinancial, and pays them more than $1 billion a year to do so. The companies earn a fee per borrower per month, which advocates say discourages transparency around loan forgiveness opportunities.
Even when borrowers are enrolled in these plans, servicers don’t always keep track of their payments,…
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