The Biden administration last week announced changes to a key grant program for teachers that has been under fire for complex bureaucratic requirements and poor management.
The Teacher Education Assistance for College and Higher Education (TEACH) Grant Program provides federal financial assistance to students who agree to work as teachers in low-income, underserved school districts after they graduate. The assistance comes in the form of grants — rather than student loans — which do not have to be repaid, as long as the recipient maintains eligibility and fulfills the four-year service obligation. This allows students to not have to rely as much on student loans to pay for their education. However, for recipients who fail to maintain their eligibility, such as by leaving their teaching assignment too soon or failing to submit required annual paperwork, their TEACH Grants can be converted to student loans that have to be repaid, with interest.
Consumer advocates have accused the U.S. Department of Education and its student loan servicers of rampant mismanagement of the TEACH Grant program. Massachusetts Attorney General Maura Healey sued FedLoan Servicing, a student loan servicer that administers the TEACH Grant program, accusing the servicer of allowing simple errors or omissions by borrowers on TEACH Grant forms to snowball into major problems, including the improper conversion of those grants into student loans. The lawsuit was recently settled, and FedLoan Servicing did not admit to wrongdoing.
The Biden administration will be making several important changes to the TEACH Grant program:
- The Department of Education and FedLoan Servicing will streamline the annual documentation requirements for the program, with more reminders and clearer communications.
- TEACH Grant recipients will no longer have their grants converted to loans if they do not certify their eligibility on time.
- If TEACH Grant recipients do not certify at the end of each year of teaching, their grants will not be converted to loans until they do not have enough time to complete the required four years of service within the eight-year deadline, as required by the program.
- The Department of Education is allowing for additional flexibility for periods when a TEACH Grant recipient cannot fulfill their service obligation during an academic year.
- For TEACH Grant recipients whose grants are converted to loans, the Department of Education has established a reconsideration process. Recipients will also be entitled to additional relief if their TEACH Grants were converted to loans in error.
“Our teachers are champions of students’ potential and stewards of their success. Respecting and honoring teachers who serve students with the greatest needs also requires that we ensure these educators receive the support to which they are entitled from this important federal program without having to jump through unnecessary hoops,” said U.S. Secretary of Education Miguel Cardona in a statement last week. “The changes [will] deliver much-needed improvements to the TEACH Grant. “
The TEACH Grant program is separate from the Public Service Loan Forgiveness (PSLF), which allows borrowers to get certain federal student loans forgiven after making 120 qualifying monthly payments. PSLF has also been riddled with problems, and advocates are calling for major changes to that program, as well.
Earlier this year, over 100 organizations sent a letter to Secretary Cardona, calling on him to use emergency pandemic authorities to conduct a full, 90-day audit of the “broken” PSLF program and to automatically forgive the student loans of all borrowers who have completed ten or more years of public service, regardless of their specific compliance with the PSLF program’s opaque requirements. Student loan borrower advocacy organizations and Democrats in Congress have also called on the Biden administration to extend the current pause on federal student loan payments, currently set to expire on September 30, until programs such as PSLF can be fixed. So far, the administration has not acted.