Teachers Sue Student Loan Servicer for Turning Their Grants into Loans
Two teachers are suing Pennsylvania Higher Education Assistance, a student loan servicer that manages loans and grants, for converting their federal grants into loans. There have been many complaints filed about misplaced documents, false information, inexplicable denials for programs, or just unresponsiveness.
Student loans are hard to deal with. They take a toll on your living expenses and can prevent you from spending that money how you’d like to. Imagine being one of these two teachers who is suing their student loan servicer for turning their grants into student loans.
Two teachers are suing Pennsylvania Higher Education Assistance, a student loan servicer that manages loans and grants, for converting their federal grants into loans. The case isn’t without company. There have been many complaints filed about misplaced documents, false information, inexplicable denials for programs, or just unresponsiveness.
The main complaint of this particular lawsuit is the handling of the Teacher Education Assistance for College and Higher Education Grant. A federal program that provides money to the students that are willing to work in high-need schools or teach high-need subjects for four years. The teachers do have to send in paperwork verifying their employment and that it is eligible for the program. If this doesn’t happen the grant is converted into a loan and must be repaid with interest.
Fedloan Servicing, which is a part of Pennsylvania Higher Education Assistance, takes care of the teacher grant process for the Education Department. However, Fedloan has been accused of converting grants to loans as an error. Yet, they refuse to fix the situation.
David West, one of the plaintiffs, cited everything going smoothly the first year of the program with Fedloan. He was verified as an art teacher at White Knoll High School in Lexington, South Carolina. However, upon recertifying the next year, West was missing a signature on his form. West did take action and corrected the mistake within the 30 days allowed but that did not stop Fedloan turning his $4,000 grant into a $4,000 loan.
“I was beyond frustrated, enraged,” said West, who is now refusing to make payments on his loan. “If I had not done the teaching, if I had not followed through, then that’s one thing. But I did exactly what was asked of me, and here I am.” West is in his fifth year of teaching at White Knoll and is now being threatened with wage garnishment after his refusal to pay.
A very similar situation for Ashley Ford, a special education teacher at Stanton Middle School in Kent, Ohio. She too neglected a signature on the paperwork but was assured by a representative that everything would be okay once she sent the new form. However, her $7,000 grant was turned into a loan and after a year of disputing has accrued $1,997 in interest on top of her newly undeserved loan.
These two teachers are, unfortunately, not alone. The TEACH grant program had problems when the Government Accountability Office found 2,252 recipients had their grants unceremoniously and unjustly turned into loans between August 2013 and September 2014.
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