Title: What to Know About Your Student Loans Under Trump 2.0.

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Brian Lehrer: It's The Brian Lehrer Show on WNYC. Good morning again, everyone. Let's talk about your student loans. Even before Trump and the Republican Congress got elected with their hostility to President Biden's student loan forgiveness program, the programs for many Americans with student loans were in a mess in many ways. Add to that the ideology strikes and federal worker layoffs that might make things even worse or rescind student loan forgiveness categories that you've been depending on for years.

Let's try to unpack what's already happening, what new real concerns might be, and where you can be reassured. We're very happy to have with us Charlotte Cowles, financial advice columnist for New York magazine's The Cut. She has an article with a straightforward headline, Should I Be Worried About My Student Loans? Charlotte, thanks for coming on. Welcome to WNYC.

Charlotte Cowles: Thank you. Thanks so much for having me.

Brian Lehrer: Listeners, yes, this is an advice segment with an actual financial advice columnist, so your personal stories and questions are welcome here right now. 212-433-WNYC, 212-433-9692. You can call or you can text. Charlotte, I'll just read the first question from your article that you try to answer to set you up. It says, "Why are so many student borrowers seeing errors and disparities in their accounts right now? Is it Trump or DOGE or something else?" Let me ask, what are the most common kinds of disparities or errors people are experiencing?

Charlotte Cowles: The most common errors that people are experiencing are actually payment errors that are coming not necessarily from the government, but from the servicers who manage student loans. These are third-party contractors or vendors who are paid by the government to manage all of the nuts and bolts of loan servicing, like collecting payments, deciding when payments are due, keeping records of when you've paid, how many payments you've made.

To give some broader context, the government has outsourced loan servicing for student loans, for federal student loans, for as long as federal student loans have existed. During the pandemic, when all of the federal student loans were put on pause, a lot of these loan servicers kind of got shuffled around. In some cases, their contracts just ended and they they didn't renew them. What happened was there was this huge migration of student loans to new servicers, which created a lot of errors and just general chaos when student loan payments resumed, especially because they resumed with a lot of new plans in place.

What a lot of people are seeing is just mistakes, weird charges, something known as ghost balances, which is when a loan has been forgiven, but there's still this weird phantom balance hanging around on your account, on your service, or website. It's a real mess.

Brian Lehrer: Okay. To the second half of the question that you were answering in the article, is it Trump or DOGE or something else?

Charlotte Cowles: This actually does not appear to be anything to do with the Trump administration or anyone they've been working with. It's really more general incompetence and lingering messes that were left when student loan repayments resumed. It's not good. I will also say that while the current administration hasn't necessarily directly done anything to cause these problems, they're certainly not doing much to help.

Many of the people who would be able to help, such as the Consumer Finance Protection Bureau and the Office of the Ombudsman at the Department of Education that helps with student loan issues, remain either drastically understaffed or, in some cases, the entire department that would be able to help with these issues has been eliminated. It's a messy combination of all of the above.

Brian Lehrer: Listeners, we'll go to your calls and text in a couple of minutes. You can call now and get in line or text a question about your student loans, 212-433-WNYC, 212-433-9692, for Charlotte Cowles, financial advice columnist for New York magazine's The Cut, with her article, Should I Be Worried About My Student Loans? Another question you address in the article, what does last week's court ruling, which blocked part of Biden's student debt relief plan, mean for student borrowers who had signed up for it?

Charlotte Cowles: The SAVE Plan, which was put in place by the Biden administration, was pretty swiftly blocked by courts before key parts of it could take effect. Even still, there are about 8 million people enrolled in it who are currently in forbearance because their plan has just been languishing in the court system. What will happen next? It seems that the SAVE Plan is not going to move forward.

The borrowers who were enrolled in it will have to figure out a different plan to take part in. They're still in forbearance until the fall. In the meantime, what they should do is look for alternative plans that they can enroll in. What is particularly devastating about the fact that this plan won't move forward for some people is that they thought they would be eligible for certain forgiveness measures and plans under it, and it looks like they will not be. That means that certain people who thought they were going to get loan forgiveness or were on track to get loan forgiveness will not receive it.

Brian Lehrer: That's really going to be hard for some people, right?

Charlotte Cowles: For sure, it's devastating.

Brian Lehrer: Here's a question in a text. Listener writes, "I am a social worker and I have been enrolled in the PSLF, that's the Public Service Loan Forgiveness program, since 2016. I enrolled in the Biden administration's buyback program to make payments that were previously considered ineligible. I was told I would hear back in 45 business days and we are way beyond that deadline. I'm currently in loan limbo. Is there anything I can do?"

Charlotte Cowles: Unfortunately, I think loan limbo is the key term. There are a number of avenues available to people who are in this loan limbo. One is to reach out to the Office of the Ombudsman at the Department of Education. Again, it's hard to give that advice because I can't say that you will get a response. Another is to reach out to one of the many nonprofits that help people with student loan issues.

There are some really good ones, including the Institute for-- Excuse me, I don't want to get this wrong. There's the Student Borrower Protection Bureau and the Institute for Student Loan Advice. These are great nonprofits where you can reach out and get direct help with your student loan questions. They'll actually get in the weeds with them with your actual accounts and help you resolve questions that you have.

Brian Lehrer: What's the name of that organization? I think a number of people who are calling or texting might want to get that kind of advice. Who did you say?

Charlotte Cowles: One of them is just at freestudentloanadvice.org it's known as TISLA. The other is the Student Borrower Protection Center.

Brian Lehrer: Let me ask you a follow-up on the Public Service Loan Forgiveness program. This is, I guess, more political. I've heard from someone who's on that program. They had a big student loan bill, but there's this government program for people who don't know what it is, that if they work for a qualifying nonprofit or certain kinds of public service jobs for 10 years, those loans will be forgiven then, right?

Charlotte Cowles: Yes.

Brian Lehrer: The concern is that Trump and the MAGA Congress are hostile to nonprofits generally as well as to student loan forgiveness as a category, and they might rescind that program even for people who are years into their lower-paying public service careers. Have you heard that and do you have any reason to believe that they would or wouldn't go that far as to cut those graduates off in midstream?

Charlotte Cowles: Yes, that is a really common fear and totally understandable. It would be devastating to be nine years into your nonprofit career. A lot of people take these jobs because they believe in the mission of the nonprofit where they work, but also because it's almost like a benefit of the job, which is that it helps them qualify for Public Service Loan Forgiveness.

There is no reason to believe that people who are currently enrolled in Public Service Loan Forgiveness programs will not be eligible for it. Linda McMahon, who is Trump's pick to lead the Department of Education, actually testified during her confirmation hearing that she believes in the importance of the Public Service Loan Forgiveness program and basically won't mess with it for what that's worth.

Brian Lehrer: Of course, RFK testified at his confirmation hearing that he wouldn't mess with the childhood vaccine schedule, and that seems to be going in a different direction already. Anyway.

Charlotte Cowles: Right. Which is why-

Brian Lehrer: It's still encouraging.

Charlotte Cowles: -I have caveats around that. Public Service Loan Forgiveness has been in place for an extremely long time and it was put in place under the Bush administration. Over a million people over the past several years have received loan forgiveness through it. The Biden administration did iron out a lot of issues that had been rife with red tape and other problems over the years. A lot of those have been streamlined. It looks like, for now, courts have upheld it. It's established enough that it would be very unlikely that the Trump administration would do something to mess with it.

Brian Lehrer: That's going to be reassuring for a decent number of our listeners, I'll tell you that. Catherine in Chicago at 212-433-WNYC with Charlotte Cowles, financial advice columnist for New York magazine's The Cut on student loans under Trump and DOGE. Hi, Catherine.

Catherine: Hi, Brian. Mega superfan calling from Chicago. My question is, I had a sort of epic student loan journey. In 2023, the loans were forgiven. I actually got a refund for money that I had overpaid over the 30 years that I had the loans. Now, I'm just flipping out because I hear about these clawbacks of money. I'm just wondering, am I in any danger of them coming back to me for what they refunded and also then setting my loan balance to what it was?

Brian Lehrer: Charlotte?

Charlotte Cowles: Catherine, first of all, I totally understand the fear that you have If you go on Reddit or look online, there are just tons of stories of stuff like this happening, and it's awful. No one should have to live in fear that forgiven loans will suddenly resurface to haunt them.

Catherine: Yes.

Charlotte Cowles: What you can do. Unfortunately, there are instances of balances reappearing. Usually, it is through your loan servicer. It won't show up on your government student loan account. What you do want to do is, and a lot of people once their loans are paid off or forgiven, they don't keep checking their account because why would they? The loan is over, but you should recheck that account. Make sure that there are no loans that are mysteriously appearing. These are known as ghost loans or phantom loans.

If one does contact your loan servicer directly, try emailing them. A lot of these servicers have hours and hours of wait times on the phone. It can be hard to find an email address, but they usually exist. It also provides a paper trail so that you can take screenshots of what you're seeing if you have to contest anything and make sure that they have all of the information that you do. If those loans do show up, which I really hope they don't, and I should also say, in most cases, they don't, but most is not all. If they do show up, then take it up with the servicer. It's an error, it's a mistake. They cannot rescind forgiveness that you have earned.

Brian Lehrer: Catherine, thank you.

Catherine: Thanks.

Brian Lehrer: Thank you very much. Well, this relates to another of the questions that you address in your article. Maybe it's the same question, you tell me. It was, "My loans were forgiven, but now they're showing up again on my credit report. What do I do? Do I still owe that money?" What's the answer to that?

Charlotte Cowles: The answer to that is no, again, you don't. It's a mistake. I think that is, again, one of the many complexities that we're dealing with with all these student loan servicers. They're just making errors. In many cases, one of the reasons that this is all coming to our head now is that a lot of these errors were glitches or just weird echoes in the system when these servicers started repayments or were trying to bundle together all of these different loans that they were moving around.

It's only now that a lot of borrowers are seeing them or becoming aware of their existence because it's been long enough that it's starting to trickle into things like your credit report or that enough time has passed that it is starting to bleed into other things that you would see. If one of these loans does affect your credit report, you can immediately dispute it with the credit reporting agency. It is a mistake. It is your credit reporting agency's job to correct errors in their credit reporting. You can get that fixed directly with the credit reporting agency. Then you would also want to go through the proper channels with your loan servicer to have that discrepancy cleared up.

Brian Lehrer: Jose in Brooklyn, you're on WNYC. Hi, Jose.

Jose: Hi, Brian. Thank you for having me on. I adore you. I just called in because I wanted to say that I was recently forgiven for my loans in December. I've been working for a nonprofit for over 10 years, and so I'm very thankful and grateful about that. However, I think the biggest issue is that, yes, the program was put into place under the Bush administration, but it wasn't really taken off the ground until Biden. Although all these Trump picks are saying that they're not going to dismantle it, they can do a lot administratively to slow down the processing of forgiveness, and that will affect a lot of lives. That's really what concerns me for all the people who are waiting.

Charlotte Cowles: First of all, congratulations on having your loans forgiven. That's a major accomplishment.

Jose: Thank you.

Charlotte Cowles: You're correct. The actual processing of forgiveness, it can be very time-consuming. I've heard from some people. Even after they know that they qualify for the rest of their loans being discharged, it has taken up to six months after that for the discharging to be processed.

Jose: It took me over a year. Sorry to interrupt, but it took me over a year. I've been waiting and waiting. Thankfully, I was forgiven right before Trump came into office. I don't have any trust that they're going to feel any need to expedite anybody's forgiveness, especially when they're talking about dismantling the Department of Education.

Charlotte Cowles: Yes. I understand that concern. I don't know. I don't know if anybody really knows how the actual timing of forgiveness processing will be affected under the new administration, but I do know that if the Department of Education is dismantled, student loans will not go away. Again, it would take an act of Congress to dismantle the Department of Education, also to be clear. In this sort of extreme case that it were dismantled, student loans would not go away. They would most likely be absorbed under the Department of the Treasury. Again, this is pretty far down the road. I can understand your concern around delays in processing.

One other thing that I do want to mention though is that even though Public Service Loan Forgiveness was instituted under the Bush administration, one of the reasons why you didn't see that many people actually achieving forgiveness through it was that it required 120 on-time payments of student loans while working at a nonprofit for forgiveness to actually occur.

Even though it had been enacted long before Biden took office, one of the reasons why we saw a lot of forgiveness start to come through was partly because he removed certain impediments, or the administration did, but also because that's when it was becoming ripe. That was when a lot of people had made the number of qualifying payments that they needed to make if they started it in like 2009, 2010 because it takes 10 years to make 120 qualifying monthly payments. That was also a timing issue rather than an administration issue.

Brian Lehrer: Jose, I hope that's helpful. Congratulations on getting--

Jose: Brian, thank you so much.

Brian Lehrer: Thank you so much. We're just about out of time. I'm going to read a two-part question from one more listener in text, and then I'm going to ask you again to give out contact information for people who did not get advice from you on a radio show today but could get it from organizations that do this.

Listener writes, "For those of us enrolled in the Public Service Loan Forgiveness on the SAVE Plan, the Education Department removed the income-driven repayment application on Friday. How can we enroll in a new income-driven repayment plan?" This person also asks, "The other nightmarish anxiety-producing issue is for those of us in forbearance because of SAVE Plan litigation. That's the Biden loan forgiveness in the courts." The listener writes, "Our interest keeps going up and up, meaning payments will be higher and higher on a new plan if it continues again." Can you give that person and others in that boat any advice to wrap it up?

Charlotte Cowles: Yes. It's really hard to offer advice about this because there just aren't really great options. Right now, if you try to apply for a new income-driven repayment plan through the studentaid.gov website, the page is just blank. Unfortunately, it looks like student borrowers will simply have to research alternatives. There are payment simulators that you can enter your information into that will calculate what your monthly payment options can be based on your household income and your loan, the amount that you owe. A lot of these options are not going to be great for a lot of people, and that is really unfortunate.

Brian Lehrer: I'm going to give the name of a place that a listener reminded us does this kind of advice. It's the Community Service Society of New York. You can look them up. If you need more student loan advice, maybe they can help you, or name those one or two that you stated the names of before.

Charlotte Cowles: One is the Student Borrower Protection Center. The other is TISLA. It's at freestudentloanadvice.org. There's also, I believe it's called the Student Debt Crisis Center. I should also very, very strongly say that no one should ever charge you for student loan advice. There are a lot of predatory organizations out there that will, "For a one-time fee, we will help you lower your student loans." Do not go with any of those people. There are a lot of nonprofits that will offer you free, good, sound student loan advice. If anyone tries to charge you, run in the other direction.

Brian Lehrer: Free student loan advice from Charlotte Cowles, financial advice columnist for New York magazine's The Cut. Thank you for sharing it with us.

Charlotte Cowles: Thank you so much for having me.

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