PhotoThe plight of teachers whose federal grants are suddenly -- and in thousands of cases wrongfully -- converted to delinquent loans is a problem that education bureaucrats know about but have chosen to ignore, although the issue is beginning to percolate in Congress.

"We have a real problem here,” said Rep. David Joyce (R-Ohio) in a recent letter to Secretary of Education Arne Duncan. “Programs to help ease the burden of teacher loans all too often don’t accomplish that goal. Instead, they end up leaving many qualified candidates with costlier loan payments and more debt. It’s time to create a more effective approach that gives teachers the support they need to make a difference in the lives of kids everywhere.”

The TEACH Grant Program was established by Congress to encourage more teachers to go to “high-needs” schools and teach subjects that are critically important to students’ success. But many teachers who have lived up to their end of the deal now find themselves burdened with additional debt.

"This is an advertised federal program to help people become teachers. In reality, it's a for-profit scam," said David West, a South Carolina teacher whose grant was converted to a loan because of a minor administrative error, as reported in a recent ConsumerAffairs story.

2,252 errors & counting

The accounts of West and other young teachers are no surprise to the Government Accountability Office (GAO), which reported in May that, as of September 2014, at least 2,252 TEACH grants had been erroneously converted to loans. “Education officials said they now monitor the [loan] servicer more closely and plan to review all of the nearly 36,000 of the program's grant-to-loan conversions, but the agency has not systematically reviewed the cause of the errors,” GAO said.

West and other teachers say their grants of $4,000 or more -- awarded to them for teaching in “high-needs” schools -- were converted to delinquent interest-bearing loans even though the teachers were doing everything they were required to do but had made simple administrative errors in filling out the annual paperwork the grants require.

The teachers appealed the conversions, but their appeals were denied, something else that would not come as news to the GAO examiners. In their March 2015 report, they wrote that the Department of Education “established a dispute process to address concerns about TEACH grants converted to loans in error; however, GAO found that Education and the servicer provide incomplete and inconsistent information to recipients about the availability of and criteria for disputing conversions.”

GAO said such conduct is “inconsistent with federal internal control standards that highlight effective external communication.”

Agreed but did nothing

GAO recommended that the Education Department “examine why erroneous TEACH grant-to-loan conversions occurred, disseminate information on the TEACH grant-to-loan dispute process, and establish program performance measures.”

The department said it agreed with GAO's recommendations, but that is little comfort to the thousands of teachers who find themselves rewarded for their efforts by being plunged into debt and threatened in harsh letters telling them their credit ratings will be affected and their income tax refunds may be seized.

No one has bothered to tell them of the 2,252 errors or to assure them their cases will get a second look.

The TEACH grants are administered by FedLoan, a Pennsylvania state agency that is part of a larger agency whose primary responsibility is providing grants to Pennsylvania students. A spokesman for that agency said he could not comment and referred inquiries to the Education Department, which did not respond to repeated requests for comment.

Congress takes note

The issue is drawing the attention of several members of Congress, however. On May 7, Joyce joined with Sens. Orrin Hatch (R-Utah) and Mark Warner (D-Va.) and Rep. Derek Kilmer (D-Wash.) in a letter to Secretary of Education Arne Duncan noting the problems with the TEACH grants and other programs and saying they “look forward to working with [him]” to improve the programs.

“Unfortunately, our current federal grant and loan forgiveness programs for teachers are a jumble of uncoordinated programs that are often too difficult to navigate. We have a responsibility to our teachers, students, families and taxpayers to do better,” Sen. Warner said.

Duncan, one of the longer-serving members of President Obama’s cabinet, announced earlier this month that he plans to step down in December. Duncan, a former basketball player, said he plans to return to Chicago and  “continue to involve the work of expanding opportunity for children” but gave no indication he would do anything about the TEACH grants.

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