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U.S. Department of Education Must Overhaul Mismanaged College Grant Program

Sept. 6, 2018

U.S. Department of Education Must Overhaul Mismanaged College Grant Program

At Hearing, Public Citizen Calls for New Protections for TEACH Grant Recipients

WASHINGTON, D.C. – The U.S. Department of Education must make major improvements to its management of the TEACH Grant program to prevent grants from being wrongly converted to loans, Julie Murray, a Public Citizen attorney, told department officials today at a hearing convened to consider changes to TEACH Grant regulations.

The Teacher Education Assistance for College and Higher Education (TEACH) Grant program provides students pursuing teaching degrees with up to $4,000 a year with the requirement that recipients agree to teach for four of the eight years following their graduation in high-need fields and low-income schools and districts. If they do not fulfill the service requirements, their grants are converted into federal student loans.

Public Citizen, however, through a Freedom of Information Act request to the department, learned that more than 15,000 TEACH Grants for more than 10,000 TEACH Grant recipients were suspected to have been converted to loans in error by a previous servicer. Recent reporting by NPR indicates that just 15 percent of these recipients had their grants reconverted, sometimes years after the errors occurred.

Many other teachers have reported erroneous conversions and conversions for minor paperwork errors under the private contractor that oversees the program, as well. Of particular concern, a recent study (PDF) by the department found that 32 percent of TEACH Grant recipients surveyed whose grants had been converted to loans said that they were likely or very likely to meet the program’s service requirements or already had done so.

Public Citizen sued the department in March 2018 after the department refused to hand over additional documents regarding mismanagement of the grants or the department’s efforts to address erroneous conversions.

At today’s hearing, Public Citizen urged the department to simplify TEACH Grant program requirements and provide robust protections and solutions, including a dispute process, for teachers whose grants have been wrongly converted or are at risk of erroneous conversion in the future. Murray also urged the department to address the TEACH Grant regulations through a negotiated rulemaking committee separate from the committee(s) addressing the many other regulatory issues being considered to ensure that TEACH Grant rules receive the time and expertise they so desperately need.

“The department’s immediate attention to conversions that occur despite recipients’ satisfaction of their service requirements is critical to ensuring that the program fulfills its purpose: encouraging teachers to commit to work in high-need fields in low-income schools and districts,” said Murray. “The department must do all it can to protect TEACH Grant recipients from erroneous and any other conversions that do not advance the program’s purpose and leave teachers worse off than if they had never received a TEACH Grant.”