myfedloan/idrapp In March 2018, the NPR reported that thousands of teachers had significant debts after their federal subsidies had been unfairly turned into loans.
Here is the backstory. In 2015, the US Department of Education UU conducted an audit of the TEACH Scholarship Program after a few issues with the Government Accountability Office audit. The Ministry of Education noted that around 10,776 beneficiaries had turned their grants into loans due to errors made by the credit administrator.
myfedloan FedLoan was not the credit administrator at the time, but the Ministry of Education led them to solve the problem. The Department told FedLoan that recipients of grants should be contacted and given the opportunity to reinstate their loans as grants.
Unfortunately, FedLoan’s response to the problem was a bit superficial. They contacted the recipients of the grant … with a single letter sent by post. They did not check if the addresses contained in the file were correct, or they contacted someone who did not answer. The letter itself pointed out that the grants were turned into loans prematurely and not incorrectly.
myfedloan org gettaxinfo
The letter you probably missed
The letters entitled “INFORMATION ON THEIR EDUCATION SUBSIDIES USED FROM NON-SUBSIDIZED LOANS” began: myfedloan org gettaxinfo
“Recently, we asked our TEACH grant administrator, FedLoan Servicing, to do a quality check on the loan converted TEACH scholarships to see if the conversions were in line with the program requirements described in the ATS He had previously signed his TEACH scholarships, and through this review, we learned that his TEACH scholarships may have been prematurely turned into loans by his former TEACH grant administrator.
At the end, they issued a “Request for reimbursement of TEACH grant” form, which should be completed and sent.
Only 15% of the people whose loans became loans reacted to the letters, possibly due to a title that did not indicate the seriousness of the problem and the ambiguity of the letter. Another part of the grant beneficiaries turned their grants into loans due to minor mistakes, such as spelling mistakes. FedLoan does not take steps to restore the original status of the concessionaire.
Other borrowers have received payment requests and have been sent to debt collection if the payments made to FedLoan have not been correctly recorded in their accounts. myfedloan org gettaxinfo
If you have received a letter from FedLoan Service, complete the attached form and send it off (if you still have the letter). If you have had a TEACH grant that is now a loan, contact FedLoan to get the bug fixed as soon as possible.