WASHINGTON, D.C. [04/02/19]—This week, U.S. Senator Tina Smith (D-Minn.) and her Senate colleagues—including fellow Minnesota Senator Amy Klobuchar (D-Minn.)—called on Education Secretary Betsy DeVos to take additional action for teachers who erroneously or unfairly had Teacher Education Assistance for College Higher Education (TEACH) grants converted to loans.
In December of last year, the Education Department announced it would be instituting a process to help teachers who have been unfairly forced to repay thousands of dollars in aid. Sen. Smith said this was a good first step, but that more action is needed to improve the program. This week, as the Education Department seeks to make changes to the TEACH Grant program, Sen. Smith is again calling for more action on behalf of wronged teachers.
“We write to express our continued concern regarding the U.S. Department of Education’s (‘Department’) inadequate efforts to improve the Teacher Education Assistance for College and Higher Education (TEACH) Grant program,” wrote Sen. Smith and her colleagues. “Since our last communication with the Department regarding the unfair and erroneous conversion of grants to loans for teachers across the country, the Department has unfortunately not exercised its authority to provide full relief. As you know, errors plaguing TEACH Grant program implementation have resulted in severe financial and emotional harm to recipients who have pursued higher education with the commitment to teach in schools with a tremendous need for effective teachers. We write to request additional action from the Department to reverse TEACH Grant conversions.”
The senators closed their call to Sec. DeVos by stating: “It is critically important that the Department takes all available steps to assist teachers who have had their TEACH grants converted to loans, including a full use of its administrative authority to provide relief and fair consideration of regulatory proposals to provide additional flexibility for recipients. Our nation’s teachers deserve nothing less. Thank you for your attention to this important matter.”
The TEACH Grant program promises up-front financial assistance for college students who commit to pursue teaching careers in high-need schools. If students do not fulfill the service requirements of the program, they are liable to pay back the grant money in full with interest—but reports indicated many teachers’ grants were being converted to loans erroneously, due to small errors in paperwork or even for seemingly no reason at all. A December 2018 report from Public Citizen demonstrated years of mismanagement and reiterated that 63 percent of all TEACH Grants were converted to loans since the program began. This included over 4,800 TEACH grant-to-loan conversions between 2009 and 2016 for students who attended college in Minnesota. Sen. Smith repeatedly called for answers and action from Secretary Betsy DeVos after reports from NPR and The Washington Post shed light on the scope and severity of the problems.
You can read a letter Sen. Smith led with 18 of her colleagues about the TEACH program in June here, a repeated call from Sen. Smith in September here, and Sen. Smith’s statement from December here.
The letter Sen. Smith sent yesterday was signed by U.S. Sens. Amy Klobuchar (D-Minn.), Mazie Hirono (D-Hawaii), Bernie Sanders (I-Vt.), Jeanne Shaheen (D-N.H.), Richard Blumenthal (D-Conn.), Richard Durbin (D-Ill.), Jack Reed (D-R.I.), Sherrod Brown (D-Ohio), Elizabeth Warren (D-Mass.), Maggie Hassan (D-N.H.), Robert Casey Jr. (D-Pa.), Tim Kaine (D-Va.), and Ron Wyden (D-Ore.). You can read a copy here or below:
April 1, 2019
The Honorable Betsy DeVos
Secretary of Education
U.S. Department of Education
400 Maryland Ave, SW
Washington, D.C. 20202
Dear Secretary DeVos:
We write to express our continued concern regarding the U.S. Department of Education’s (“Department”) inadequate efforts to improve the Teacher Education Assistance for College and Higher Education (TEACH) Grant program. Since our last communication with the Department regarding the unfair and erroneous conversion of grants to loans for teachers across the country, the Department has unfortunately not exercised its authority to provide full relief. As you know, errors plaguing TEACH Grant program implementation have resulted in severe financial and emotional harm to recipients who have pursued higher education with the commitment to teach in schools with a tremendous need for effective teachers. We write to request additional action from the Department to reverse TEACH Grant conversions.
While the Department did take administrative action to provide a remedy for a set of teachers who have had their TEACH Grants improperly or unfairly converted to loans, we believe the Department can do more to address these issues. During the Department’s current negotiated rulemaking efforts on the program, it has declined address numerous conversion issues that are within the agency’s administrative authority to fix. At the same time, we have been troubled by evidence that continues to emerge regarding the scale of program’s implementation issues. We also remain concerned about the Department’s limited response to requests from Congress for more information, including on outreach efforts to grant recipients who have had their grants unfairly or improperly converted to loans.
Over the past decade, more than 138,000 students have received TEACH Grants of up to $16,000 to attract students to teach in a high-need subject in a high-poverty elementary or secondary school for at least four years. The March 2018 study of the TEACH Grant program released by the Department indicated that, for grant recipients who began teaching prior to July 2014, nearly two-thirds of recipients had their grants converted to loans, resulting in a significant amount of unanticipated debt for these teachers. A significant portion of these grant-to-loan conversions occurred in error or due to minor mistakes in the annual certification process.
The Department’s TEACH Grant reconsideration process is an important first step in addressing involuntary grant-to-loan conversions, but more can be done. First, more information is needed regarding how this process will be conducted. The Department has indicated that during the week of February 4, 2019, it emailed individuals who are eligible for reconsideration. Beyond providing a phone number and email address for FedLoan Servicing, the Department has provided only minimal information about its policies and process for this reconsideration process. No timeline has been provided to indicate how long FedLoan Servicing will take to make a determination about whether someone qualifies to have their loans reconverted. Some teachers have already spent years contesting their grant-to-loan conversions, and this continued lack of transparency is unacceptable. These individuals deserve a clear and expedited process.
Furthermore, the process that the Department has laid out does not take any clear responsibility for the damage it has caused through improper conversions and provide full relief for its failures. To require TEACH recipients who have already had their grants converted to loans to still meet the eight-year service window, no matter what career decisions they have made after the Department’s conversion of their grant, is unfair and unacceptable. The Department has already exercised its authority to suspend the eight-year service window through three specific circumstances in the implementing regulations, and is actively considering adding additional bases for suspension in the current rulemaking process. The Department has the clear authority to suspend the eight-year window for the time frame during which a TEACH Grant was converted to loan status in error. For reasons that have not been adequately explained, the Department has resisted addressing this issue in the current negotiated rulemaking process.
The Department has also failed to accept any of the regulatory proposals for allowing an appeals process for teachers who receive a denial of their service-year certification or a request for a service clock suspension. In addition to grant-to-loan conversions, these two additional categories of headaches for TEACH Grant recipients often lead to burden, anxiety, and confusion for teachers. Allowing for appeals during each step of the TEACH Grant process would be much more efficient for identifying problems before they arise and deepen. It will also alleviate burden on the Department from TEACH recipients going through more appeals of a full grant-to-loan conversion down the road.
As with other forms of appeal and claims in federal student loans, the Department should also take active steps to reduce harmful consequences on recipients during and after the Department’s consideration process. First, the Department should place TEACH Grant recipients who have had their grants erroneously converted to loans, and who subsequently appeal, into administrative forbearance without interest accumulation. Since there has been such a high rate of unfair conversions, it would only add insult to injury to put the recipient at further risk of more debt and delinquency while the Department processes the appeal. Additionally, for all teachers who successful reconvert their loans back to grants, the Department should provide a full correction of any adverse credit history incurred during the time when the aid was designated as a loan.
Finally, as we have worked to uncover and understand the full scope of issues with the TEACH Grant program, it has also become clear that the Department has not complied with its statutory responsibility to provide biannual updates to Congress on the program’s implementation. Additionally, the questions that we have submitted to the Department for further information have not been fully or satisfactorily answered. The long history of implementation issues and the scale of involuntary grant-to-loan conversions highlight both the critical need for program reform and the imperative to address past harm to grant recipients. This situation requires nothing less than a full accounting of the facts regarding the lapses that have led us to this point, as well as an exhaustive effort to provide appropriate remedies for every teacher harmed by these failures. Given the Department’s mismanagement of the program, repeated servicer errors, and years of backlogged disputes, ongoing plans and policies for change require extensive oversight.
We ask the Department to provide us with the following information and answers:
1. Have all of the Department’s previously announced automatic reconversions of loans back to grants for TEACH recipients who were subject to servicer error been completed? If not, when will these automatic reconversions be completed?
2. What specific policies, procedures, or guidelines has the Department provided FedLoan to respond to grant recipients who have experienced a grant-to-loan conversion?
3. What specific criteria are in place for FedLoan to make a determination that loans should be reconverted back to grants?
4. What is the timeframe for FedLoan to provide an initial response, upon being contacted by a grant recipient?
5. If a grant recipient is determined to be eligible to have their loans converted back to grants, what is the timeframe for FedLoan to finish this process?
a. What specific policies and procedures are in place for addressing potential damages caused to a grant recipient’s credit history?
b. What specific policies and procedures are in place to refund any money paid toward those loans? And are there guarantees in place to assure refunds will not be redistributed to other loan accounts, unless by the express request of the recipient?
6. In the event that a grant recipient is found to be ineligible to have their loans converted back to grants, what policies, procedures, or guidelines has the Department put into place to address potential disputes?
7. The number of TEACH Grant recipients to date, disaggregated by:
a. Those that are still enrolled in an eligible program of study, by state
b. Those that have withdrawn from an eligible program of study, including:
i. The number who subsequently reenrolled in an eligible program of study
ii. The number who did not complete an eligible program of study and subsequently had their grant converted to a loan
c. Those that have completed an eligible program of study, including:
i. The number who have completed the service requirement
ii. The number who are making progress toward the service requirement and have not experienced a grant-to-loan conversion
iii. The number who experienced grant-to-loan conversions
d. Of those who have experienced a grant to loan conversion:
i. The number who are making payments toward those loans
ii. The number who are in default
iii. The number who are have paid off the loan
iv. The number who have subsequently had their loan reconverted to a grant
v. The reasons for the grant-to-loan conversion
vi. The number by state
8. The number of grant recipients who have requested suspensions or proportional discharge, and the number of grant recipients who have received suspensions or proportional discharges, broken down by year.
It is critically important that the Department takes all available steps to assist teachers who have had their TEACH grants converted to loans, including a full use of its administrative authority to provide relief and fair consideration of regulatory proposals to provide additional flexibility for recipients. Our nation’s teachers deserve nothing less. Thank you for your attention to this important matter.
Sincerely,
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