New GAO Report: Income-Driven Repayment System in Urgent Need of Reform

WASHINGTON – A new report released today by the Government Accountability Office (GAO) found that long-standing flaws in the Department of Education’s Income-Driven Repayment program that have left thousands of student loan borrowers without the loan forgiveness for which they may be eligible.

Income-Driven Repayment (IDR) plans allow borrowers to reduce their monthly repayment amounts and extend repayment periods. Under IDR plans, the borrower’s remaining loan amount is forgiven following these repayment periods. However, according to the report, mismanagement of student loan repayment data has caused loan servicers and the Department of Education to miscount repayments and inaccurately track borrower’s progress toward forgiveness. As a result, at least around 3,000 student loan borrowers who may be eligible for IDR forgiveness have not received forgiveness. Moreover, the report found that, by 2030, the number of borrowers that might be left without forgiveness could grow to approximately 600,000 borrowers with approximately 1.5 million loans.

“Today’s GAO report confirms serious problems with the management of Income-Driven Repayment plans, which were intended to serve as a safety net for low-income student borrowers and provide them with a clear path to loan forgiveness,” said Chairman Robert C. Bobby Scott (VA-03)“I am pleased that the Biden-Harris Administration announced steps to fix the problem and help students receive the loan forgiveness to which they are entitled. I continue to stand ready to work with the Department of Education to improve the Income-Driven Repayment program and ensure our student loan system delivers on its promise to borrowers and families.”

Chairman Scott requested the GAO report in 2019 when borrowers in IDR plans first became eligible for forgiveness. On April 18, 2022, Chairman Scott and Senate HELP Committee Chair Patty Murray (D-WA) sent a letter urging the Department of Education to implement a solution for borrowers in IDR plans. The following day, the Department of Education announced major improvements to the IDR system to help eligible borrowers access the relief to which they are entitled. 

For highlights of the report, click here.

For the full report, click here.



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