Exclusive: Ed Department To Erase Debts Of Teachers, Fix Troubled Grant Program

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For public school teacher Kaitlyn McCollum, even simple acts like washing dishes or taking a shower can fill her with dread.

"It will just hit me like a ton of bricks," McCollum says. " 'Oh my God, I owe all of that money.' And it's, like, a knee-buckling moment of panic all over again."

She and her family recently moved to a much smaller, older house. One big reason for the downsizing: a $24,000 loan that McCollum has been unfairly saddled with because of a paperwork debacle at the U.S. Department of Education.

The Trouble With TEACH Grants Education Department Plans To Fix Flawed Federal Grant Program Education Department Plans To Fix Flawed Federal Grant Program Listen · 6:33 6:33

But for McCollum and many public school teachers, it appears the nightmare is nearly over.

The Education Department is releasing a plan Sunday to help these teachers who have been wrongly hit with debts, sometimes totaling tens of thousands of dollars, because of a troubled federal grant program.

The move comes after an almost year-long NPR investigation that brought pressure on the department. In May, the Education Department launched a top-to-bottom review of the program. Amid continued reporting, 19 U.S. senators sent a letter, citing NPR, saying the problems should be fixed.

When NPR breaks the news to McCollum that the Department of Education is going to fix this, she is astonished.

"Are you serious?" McCollum says quietly. The teacher from Columbia, Tenn., is in her new home, where the walls are bare but there's a Christmas tree that she and her husband, A.J., have just put up. The floor is littered with pine needles as her 19-month-old son, Louther, plays in the next room.

Her eyes well up. She lifts a hand to her mouth and laughs. And then she cries. "That is such good news. Oh, that is such good news."

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The source of the trouble for these teachers boils down to one word: paperwork.

Since it began in 2008, the goal of the TEACH Grant program has been to entice talented, young teachers to take hard-to-fill jobs at schools in lower-income districts, where they are badly needed.

Grants for aspiring teachers to work at low-income schools

Here's how it works. Aspiring teachers get grant money to help pay for their own college or graduate school. In exchange, they agree to teach a high-need subject, including math or science, for four years in a school that serves low-income families.

But for many teachers, it has turned into a financial disaster because their grants were converted to loans — with interest. All because of paperwork issues.

"On the phone, honestly, I cried at one point. I was like, 'This isn't right. It's not fair,' " says Victoria Libsack, who had her grants involuntarily converted to loans after her first year of teaching in a low-income, South Phoenix, Ariz., school.

Libsack had pleaded with a call center agent to reverse the conversion. "I kept asking [for help], and they're like, 'I'm sorry. There's nothing we can do.' And I was just crying to them, like, 'How is this even possible?' "

Here's what happened: The program requires teachers to submit paperwork annually, for four years, certifying that they are teaching in a low-income school. But the form itself is notoriously obscure. Even the Department of Education agrees, calling it "too complicated and confusing" in one internal document.

Making matters worse, reminders to complete the paperwork are sometimes sent to outdated addresses, and for many teachers, the form must be completed over the summer when their principals, who have to sign it, are away on vacation.

The most significant issue is the deadline. If teachers submit their paperwork late, or if it's missing a signature or a date — any little problem — the consequences are catastrophic.

One missed deadline and a $24,000 loan

For three years, McCollum sent in her paperwork on time without incident. But in her fourth year of teaching, the last year she had to submit it, she was told her form had arrived late, and her grants were converted to loans, with interest. That's why she now owes more than $24,000. At the time, McCollum wrote a formal appeal:

"I now face owing the equivalent of a new car [payment] ... because the paperwork was received from me a week after the deadline. I humbly ask that you consider all of the years of my hard work and dedication to inner city education. ... My husband and I both have worked so incredibly hard to be anywhere but this situation. ... We thank you for your consideration and truly hope that you find favor with us on this issue, as it could truly change our lives."

McCollum's appeal was denied.

So were Libsack's appeals for help. She was told her paperwork was processed one day late. And it has been the department's policy that even if paperwork is just a day late, that should trigger the conversion of a grant to a loan — a process that is irreversible.

"Teachers who work in Title I schools are passionate and they are giving all of themselves," Libsack says. "So to take advantage of teachers in this way is ... so unjust and something needs to be done about it."

Internal department documents obtained by Public Citizen, a consumer advocacy group, show that even FedLoan, the company that manages the program for the department, recognized that this paperwork inflexibility was hurting qualified teachers and advised the Education Department to fix it. In one 2015 interaction with the department, FedLoan wrote:

"We believe that [annual] certification is an obstacle for TEACH Grant recipients to completing their service obligation, and doesn't represent their having no intention to honor the meaning behind the grant: that they serve a low income school in a high need field."

In the memo, FedLoan even requested the authority to change loans back to grants for teachers who were clearly meeting the spirit of the program — teachers like McCollum and Libsack.

Now, in a tacit acknowledgement that the terms of the program have been too inflexible and punishing, the department is doing something about it.

A second chance

The Department of Education now says it will give teachers who lost their grants because of paperwork problems a second chance to prove they were meeting the program's teaching requirements. It doesn't matter if a form arrived late or incomplete in the past. If teachers can now document they were teaching a high-need subject in a low-income school, which was the purpose of the program, they'll get credit for those years of service and have their loans turned back to grants.

Enlarge this image toggle caption Stacy Kranitz for NPR Stacy Kranitz for NPR

"We get focused on, you know, budgets and legislative requirements and things like this, and frankly, I think sometimes we forget who we ultimately work for," says Chris Greene, the chief customer experience officer for the Education Department's Federal Student Aid office. "We know these folks made career-defining decisions to do very noble work. We are absolutely supportive of it. We know we can do better, and that's what we're trying to do today."

Here's how this fix will work. For teachers who can prove they have fulfilled all four years of service, their debts will be erased. If they have been paying back these loans, the department says those balances will be erased and teachers will be refunded whatever they have paid into the system.

For teachers who have not yet taught the full four years, they too can now get credit for all years served in a qualifying school, regardless of any past paperwork problems. Their loans will be converted back to grant status, and they will have the opportunity to get back on track and complete their service. One caveat: the original terms of the program require that teachers complete four years of service within an eight-year window, and that's still the case.

Also, none of this will be automatic. As part of this change, the department will reach out to teachers it thinks might qualify for the fix, which it is calling a "reconsideration process."

But Federal Student Aid Communications Director April Jordan says the burden is still on teachers to speak up. To get their money back, "they need to raise their hand and tell us that they want us to take a look at their certification again," she says.

If they do that, thousands of teachers around the country who have been hurt by the program would likely be eligible for help.

The scale of the problem

An internal Department of Education survey that was first obtained by NPR found that 1 in 3 participants whose grants had been converted to loans said that he or she was nevertheless likely to meet TEACH's service requirements or had already met them. The report estimated that was upwards of 12,000 teachers.

Another internal document, obtained by Public Citizen, shows that more than 4,000 formal disputes have been filed by teachers who lost their grants because of late paperwork. And those disputes very likely understate the scale of the problem.

Many teachers have told NPR that call center workers actually advised them not to bother disputing the loss of their grants if they missed a deadline.

"I'm like, 'Let me talk to your supervisor,' " David West told NPR earlier this year. The Lexington, S.C., teacher called FedLoan when his grants were involuntarily converted because of late paperwork. West says the representative on the phone told him, "You can talk to who you want and ... you can try to appeal this if you want. But nobody ever wins."

Enlarge this image toggle caption Sean Rayford for NPR Sean Rayford for NPR

As part of its fix, the department says it will also review the older cases of an additional 10,000 teachers whose grants appear to have been converted to loans completely by mistake.

The department is also making changes to protect future teachers. It is extending deadlines and redesigning the certification process to make it much less likely that teachers run into paperwork problems in the first place.

Not all good news

Some teachers who lost their grants say they chose, as a result, to change schools or quit teaching altogether. For these teachers, completing their service within the program's 8 year window may be a challenge.

They include teachers like Libsack. She says she taught for three years in a qualified South Phoenix school but moved to another state and now teaches in a school that doesn't qualify. Six years have passed in Libsack's eight-year window. So to erase her debts under the new fix, the clock is ticking. She would need to quit her current job and teach another year in a low-income school within the next two years.

"I'm very happy that I at least have a chance to not have to pay back all this money," Libsack says. "But it also puts me in a bad situation because this school where I'm working now, I've established relationships with kiddos and families and staff. And so now I'm going to have to rethink next year because I don't have a very big window."

Libsack says she wishes the department would give teachers like her more time. Julie Murray agrees. An attorney with Public Citizen Litigation Group, Murray has been fighting the department to release documents related to the TEACH Grant program.

In fact, Murray says, "the department already has a policy where it suspends the eight-year period in some circumstances. So this is not a case in which Congress hasn't given the department authority."

Murray points to one more challenge that, she says, the department may have to contend with: The paperwork form the program provides teachers to certify that they taught in a given year doesn't appear to have gone through a required government review, though it's not clear what, if anything, that might mean moving forward.

Murray says the department should further overhaul the program over the coming months in a process that's already underway, known as negotiated rule-making.

"I am ecstatic"

One thing is clear. For teachers who have been hurt by this program, the fix the department is announcing Sunday could help many of them get their grant money back and move on with their lives.

While McCollum still has to go through the official reconsideration process, which could take several months, she says she is going into the holidays with a $24,000 weight off her shoulders.

"I feel very much freed," she says. "I am ecstatic."

The department is working to finalize the details of its fix by the end of January.

Teachers are encouraged to go to www.studentaid.gov/teach-reconsideration to find out what they need to do.

NPR wants to hear from teachers as they go through the reconsideration process. Please share your stories with us here. You can find all of NPR's reporting on the troubled TEACH Grant program here.