| 摘要 | Last week, the Associated Press reported on a 2017 Education Department review that alleged Navient Corporation, a major student loan servicer, neglected to inform some borrowers of all their options before moving their loans into forbearance. Senator Elizabeth Warren (D-MA), who provided the review documents to the press, accused the company of “cheating” and “sabotaging” student borrowers. Navient argues that in most of the specific cases flagged by the Department, its representatives followed the rules and arrived at the appropriate solution.
Regardless of whether Navient or its critics are in the right, the episode highlights the need for the federal government to simplify its loan program. Eliminating forbearance as an option is a great place to start.
The federal student loan program offers borrowers nearly a dozen repayment plans, as well as several options to postpone making payments entirely. One of these options is forbearance, which allows borrowers to avoid payments for up to three consecutive years. Interest continues to accrue while a borrower is in forbearance. Loan servicers have the power to grant a forbearance for any reason—a borrower need not prove a financial hardship or other special circumstance.
Use of forbearance has exploded in recent years. According to the Government Accountability Office, 68% of student borrowers who entered repayment in 2013 used a forbearance within three years of entering repayment, up from just 39% for borrowers who entered repayment in 2009. One-fifth of borrowers in the 2013 cohort have used forbearance for more than half the time they’ve been in repayment.
Long-term forbearances may cause a borrower to accumulate thousands of dollars in additional interest, compared to alternative plans in which the borrower is making regular but manageable payments. Forbearance also allows colleges to game a key accountability rule which penalizes schools for student loan nonpayment. If a borrower who would have otherwise failed to pay back her loan instead moves into forbearance, the rule does not count her outcomes as a black mark against the college she attended.
A better option for borrowers is income-based repayment (IBR), which ties loan payments to borrower earnings. Under IBR, those who earn over 150% of the poverty line ($18,210 for a single person) pay a set percentage of their discretionary income toward their loans. Borrowers who make low but positive payments will reduce their total interest costs, relative to postponing payments entirely. IBR’s guarantee of affordable payments makes other options like forbearance largely redundant.
To be sure, there are circumstances in which a complete cessation of payment obligations might be appropriate (for instance, if a borrower re-enrolls in school). But those special cases do not justify giving loan servicers broad powers to postpone a borrower’s payment obligations for up to three consecutive years.
Lawmakers such as Warren and Representatives Rosa DeLauro (D-CT) and Mark Takano (D-CA) have criticized loan servicers for placing too many borrowers into forbearance. But these policymakers apparently fail to realize that the complexity of the student loan repayment system is to blame for the practices they see as shady or deceptive. Complexity confuses borrowers, while handing power to industry insiders who know how to navigate the system.
The power to simplify federal student loan repayment, and thus prevent those objectionable practices, rests in Congress’ own hands. If lawmakers take issue with Navient steering borrowers into forbearance, they can simply pass a law to restrict or eliminate forbearance as an option. Congress set up this gameable system, and now its members are complaining that people are gaming it. |
