Student debt is a crushing burden on millions of Americans. To help, Congress passed a law in 2007, creating the Public Service Loan Forgiveness Program, promising that if you're a public servant - a cop, a teacher, a soldier - and you work for 10 years, your debt will be erased.
But maybe it should be called the unforgiveness program: 98% of those who've applied for relief were told they're ineligible. We focused on the military. According to an April report by the GAO – the government's watchdog agency - of nearly 180,000 active-duty service-members with federal student loans, only 124 individuals have managed to navigate the confusing rules of the program and get their debt wiped clean.
We talked with a group you'd assume could figure it out: JAGs – lawyers who work for the military.
Lesley Stahl: What was your student debt when you went into the service?
Heather Tregle: About $90,000.
Brandon Jones: $108,000.
Carson Sprott: $150,000.
Charles Olson: over $150,000.
Charles Olson – a Marine; Carson Sprott – Air Force; and in the Army: Heather Tregle, Jonathan Hirsch and Brandon Jones. They say the rules laid out in the law seemed clear - they had to be employed in a public service job and repay typically small increments of their loans until they reached 120 payments. And whatever remained of their debt at that point would vanish: no matter how much.
Lesley Stahl: How many of you in your own mind think that you have paid up the 120 months and that you deserve to be forgiven? [ALL RAISE HANDS] All of you.
But all of them were told they're mistaken: they were off by years.
Lesley Stahl: Were any of you derelict in making your payments?
ALL: Never. No. No. Never.
Carson Sprott: As military members, if we fail to pay our debts, we're subject to discipline under the Uniform Code of Military Justice.
Brandon Jones: And our security clearances are on the line. So all this--
Lesley Stahl: If you don't pay, you lose your security clearance?
Brandon Jones: You can. If you default on your loan, you can lose your security clearance.
They all say they were walked through a bureaucratic maze that tripped them up.
Carson Sprott: Nobody ever explained that some of your loans are coded one way. Some of them are coded the other. And some of those don't qualify.
Major Carson Sprott was told he had 41 extra months of payments after he thought he was done. Turns out under the rules of the program only one type of federal student loan is eligible for relief. His type of loans didn't qualify. But he says that wasn't explained to him by the loan servicing companies contracted by the Department of Education to collect his money.
Carson Sprott: Not until I'd been paying on the loans for two and a half years.
Lesley Stahl: Aren't you angry?
Carson Sprott: I'm a little angry. (LAUGHTER) I'm a little angry. I wrote a dozen letters over my first two years to all my lenders. And I got no response other than assurances that everything was fine.
His loan servicer told him his only recourse was to convert to another type of loan and restart the month count from zero. And his other headache? Under the rules, he had to make small monthly repayments. But his repayments were so small – they didn't cover his interest.
Lesley Stahl: Do you actually owe more now than you did when you started this program?
Carson Sprott: Significantly. My initial loans of $150,000 are now at approximately $215,000.
The way this program is set up, many borrowers don't find out there's a problem for years. Army JAG Lt. Colonel Jonathan Hirsch found out after a decade.
Jonathan Hirsch: I got a letter that said I had zero months accumulated towards Public Service Loan Forgiveness.
Lesley Stahl: No!
Jonathan Hirsch: Zero. And I had been paying for ten years.
He had the right type of loans, but the wrong type of repayment plan - so he had another decade to go!
Jonathan Hirsch: All of my kids are going to college. And so I am taking out parent plus loans to help pay for their college--
Lesley Stahl: Oh, no--
Jonathan Hirsch: --at the same time that I am making payments on my loans.
Lesley Stahl: Heather, you were in Afghanistan for a year?
Heather Tregle: Yes.
Lesley Stahl: So did that year count toward your 120 months?
Heather Tregle: Half of it did.
Army JAG Major Heather Tregle, mother of two, doesn't know why those six months didn't count. She always stayed on top of her loan, even when she was in warzones. Like when she was in Kandahar and noticed her loan servicing company suddenly hiked up her payments.
Heather Tregle: So I spent days, because when you're in Afghanistan, you only can call for 20 minutes at a time--
Lesley Stahl: You're calling from over there?
Heather Tregle: Correct. So you had to use a morale line to call. And it cuts off after 20 minutes. So I would wait on hold and try to speak to them-- and get it all sorted out. And then tell them, "I am calling from Afghanistan. Can you please give me a number that I can just call you back-- that I don't have to wait on hold?" And they couldn't do that--
Here's something else that's maddening: as long as they're in a warzone they're allowed to skip their loan payments. But what's not always explained to them – we discovered - is that that brings their monthly count to a grinding halt. In other words: serving in actual combat can set them back years in getting relief
Seth Frotman: Think about what that means. Think about someone who is serving overseas. Think about how many of their kids' birthday parties they missed, only to be told, "None of that time counts."
Seth Frotman heads an advocacy group called the Student Borrower Protection Center. He says borrowers should have started getting relief through the forgiveness program four years ago – a decade after it started – but over 9 out of 10 military members who have applied for debt relief have been turned down.
Seth Frotman: Well, the first thing a 90%-plus denial rate shows you is this isn't one-off borrower's fault. This isn't just individual people who made mistakes.
Lesley Stahl: Right.
Seth Frotman: This is an entire system who let down our men and women in uniform.
Lesley Stahl: We're talking not just about JAGs. We're talking about military doctors, we're talking about cyber experts.
Seth Frotman: The Public Service Loan Forgiveness program was created because the country was desperately worried that student debt was going to stop America's best and brightest from entering critical fields like the military.
But the rules drive them crazy - like making them chase after their commanders for their signature to verify that they're even in the military.
Seth Frotman: This is where the system breaks down. Where service members are told "You're not eligible because we don't think you got the right officer to fill out your form." Or, "You may have found the right officer, but they forgot to date the form."
Lesley Stahl: Oh, come on.
Heather Tregle: They make it more difficult than it needs to be.
Major Tregle thought she did everything right to qualify: She had the right loan, right repayment plan. She can follow the fine print, afterall, her title is chief of complex litigation for the Army's prosecutors. So after nine years of paying, she confidently started filing the necessary paperwork.
Heather Tregle: I should have been about 12 payments away from 120 at that point. And they said that I had only paid 12 qualifying payments.
Lesley Stahl: They're telling you that your nine years of monthly payments amounted to one year.
Heather Tregle: Yes. So I obviously called them and said, "I don't understand. I have been in auto-payment the entire time, so you guys take my payment when it's due and the amount that is due." And the woman looked through my account and she says, "You may have an issue that we know is an issue where the auto-debit takes the payment but one penny short of what is actually due so it doesn't count."
Lesley Stahl: Woah, woah, woah. What?
Heather Tregle: So it's a known problem that through the auto-payment, it's not-- it doesn't take the full amount due. It takes one cent shorter than it should.
Nobody's ever told me if that is in fact what was wrong with those payments. That was just something the servicer said on the phone that day of, "Well, this is a known problem."
Lesley Stahl: If it's known - fix it.
Heather Tregle: Right.
And online, borrowers complain that paying a few pennies over the sum can get payments disqualified too.
Heather Tregle: I submitted my case for a review. And it sat in review for three years. And in the interim, I was paying because you're like, "Okay, well, they're reviewing it. They're doing something." But it-- the review never-- three years later, it was still under review.
It's an obstacle course. We found payments often disappear when the student loan is transferred from one servicing company to another, which happened to Marine Judge Advocate Major Charles Olson. When he applied for relief, his new servicer provided him this endless list of why he wasn't getting credit for over six years' worth of payments.
Charles Olson: All those payments don't count for a variety of different reasons. The payment wasn't on the correct due date. The payment wasn't the correct amount. And the frustrating part is I've sent the payment information via mail, via uploading to prove to them that I've-- I've made the payments, the 120 payments.
Lesley Stahl: On time. The right amount?
[CHARLES NODS AFFIRMATIVE]
He figured out that most of his records just hadn't transferred properly between servicers.
Lesley Stahl: I can't imagine that when you saw that, you didn't run out of your house and start screaming!
Charles Olson: If I wasn't a Marine-- yeah, I would have lost my bearing, ma'am.
He's been arguing and appealing for over a year in vain. Army JAG Major Brandon Jones thinks repeated human errors cost him over three years of payments - his arguing and appealing has also proved futile.
Brandon Jones: It seems like they're just trying to wear us down to the point where we either have to hire an attorney or do something else.
Lesley Stahl: Or give it up and continue to pay--
Brandon Jones: Or just give up. Yep.
Carson Sprott: These are three years of my life in the service of my nation that-- as I counted on them to count for this, they don't. And the reason they don't count, in my opinion, is that I was misled.
Seth Frotman: One of the reasons why we are in the mess we are in is because the student loan companies, who have gotten hundreds of millions of dollars to implement these programs, have cheated borrowers. They have deceived borrowers. They have chosen their bottom line over helping our men and women in uniform.
You see this in the lawsuits that have been filed across the country. You see this in the federal regulators who have taken to task the student loan industry.
Regulators like the Consumer Financial Protection Bureau, which recently concluded that loan "servicers regularly provided inaccurate information", accusing them of deception.
Carson Sprott, whose debt has grown, has left the Air Force, but he got a civilian public service job, so he's still counting months. Jonathan Hirsch, after many appeals, just got his debt wiped clean. Heather Tregle heard earlier this year that hers was too.
Heather Tregle: It was absolutely amazing. I believe I cried. (LAUGH)
This problem didn't start under President Biden, but Seth Frotman says he could fix it immediately.
Seth Frotman: So there is a law that Congress passed as the War in Iraq was raging, as the War in Afghanistan was raging, which said, no member of the military should ever be denied a benefit because of bureaucratic red tape or government bureaucracy.
Lesley Stahl: So there is an actual law that could deal with every one of the glitches the JAGs are talking about?
Seth Frotman: Yes.
Lesley Stahl: And the president, you believe, has the power to put that law in over the law that created this law.
Seth Frotman: He could do it tomorrow.
At the end of this past week, the Department of Education told us that the number of military people whose student debt has been forgiven has inched up to 350. It also said it plans to announce a major overhaul of this program as early as this week.
Produced by Shachar Bar-On. Associate producer, Natalie Jimenez Peel. Broadcast associate, Wren Woodson. Edited by Jorge J. García.
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