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We have an update now on teachers who were given grants to work in low-income schools and then - financial calamity. They say their grants were unfairly converted to loans they now have to pay back. After a series of NPR stories revealing this problem and also a government estimate that it's affecting thousands of teachers, the Department of Education now says it has launched a review. NPR's Cory Turner and Chris Arnold report.
CORY TURNER, BYLINE: The TEACH Grant Program gives teachers money to pay for college or a master's degree in exchange for making a few promises. They agree to teach a high-needs subject, like math, for four years in a school that serves lots of low-income families. That's it.
CHRIS ARNOLD, BYLINE: It sounds simple enough, but the program also makes them send in paperwork every year certifying that they're keeping those promises. And often, a little mistake - a missing signature, a date, anything - can lead to their grants - what was free money - getting converted into loans with interest.
TURNER: After our stories aired, our inboxes and social media accounts filled with messages from teachers saying, this happened to me, too.
KAITLYN MCCOLLUM: It's just - it's ridiculous. It's mind-boggling. It's been two years of torture.
TURNER: Kaitlyn McCollum is a high school teacher in Columbia, Tenn. She says every year, she sent that paperwork in on time. But the fourth year, she says the company that manages the program - it's called FedLoan - it told her they got her paperwork late.
ARNOLD: She says she sent it in on time. But suddenly, her $16,000 of grants became $22,000 in loans, and the interest keeps adding up. By the time she's done paying the government back, it will have cost her $30,000.
MCCOLLUM: I remember going out to the mailbox - and I even opened it up at the mailbox - and sheer panic just set in.
TURNER: McCollum and her husband had just found out she was pregnant with their first child. Money was already tight.
ARNOLD: So McCollum, like many teachers, appealed through FedLoan and said, basically, hey are you kidding me? I'm teaching in a low-income school. I'm doing what I said I would do. How can a little paperwork problem mean I owe this outrageous amount of money?
TURNER: But FedLoan denied her appeal, saying it could not convert her loans back to grants.
MCCOLLUM: It's just such a hopeless conversation because I'm on the phone - in between classes, pretty much - trying to get all of this information together, crying, trying to plead my case. No, no, no. I would just get shut down time and time again. Oh, they won't do that. They're not going to change their mind. Once these loans are loans, they never get changed back.
TURNER: The company, FedLoan, has told NPR it is committed to resolving borrower issues.
ARNOLD: After two years of fighting, McCollum says she'd given up hope, and many teachers who reached out to us said the same thing. But it turns out it may not be hopeless. We've now learned that the Department of Education has launched a new internal review. The department tells NPR that it is now, quote, "absolutely committed" to improving how it administers the TEACH Grant Program. That includes a new top-to-bottom review of all aspects of it. But teachers like McCollum will have to be patient. Department officials say the review will take time, and it's unclear if teachers will get their money back. The department says it may be limited in what it can do by the rules that Congress wrote for the program.
TURNER: So we wanted to know, what can it do legally to make this right? And to answer that question, we found the perfect lawyer to talk to.
JULIE MICELI: When I was at the department, an issue like what we're seeing with the TEACH grant is the very kind of issue that would've likely fallen on my desk.
ARNOLD: Julie Miceli worked as a deputy general counsel at the Education Department. She was there for five years. So we asked her, could the department make this right? Could it go back and review whether TEACH grants like McCollum's should have been converted, and if not, fix it and give some of these teachers their money back?
MICELI: I think they can. I don't think there's anything in the statute that relies on complying with a paperwork deadline.
TURNER: And this is a key point. Miceli says what seems to be happening is FedLoan has been strictly enforcing paperwork rules that she says the Education Department has the authority and the flexibility to revisit.
ARNOLD: Being so strict about paperwork, she says, goes against the spirit of the TEACH Grant Program. Yes, any program, of course, needs rules and deadlines, but...
MICELI: The consequence is so significant. It's not a fine. It's not a fee that everybody has to deal with. It's a complete conversion from a grant to a loan. And I don't believe that was the intent where you've got a borrower who's actually meeting the terms of the program.
ARNOLD: Other legal experts we spoke to also agree with that.
TURNER: Miceli also wants to be clear - she still has friends and former colleagues in the department, and says they're good people who care about education and that no one there is trying to hurt these teachers.
ARNOLD: Meanwhile, U.S. Senator Mark Warner, a Virginia Democrat, has introduced bipartisan legislation to reform the TEACH grant and other student loan programs going forward. He, too, says these teachers should get their grants back, in part because this is an important program.
MARK WARNER: And we've got a clear societal need to have good, talented teachers teaching in low-income schools. This is morally the right thing to do. Long term, economically, it's the right thing to do. It needs to get fixed.
ARNOLD: As the Education Department is figuring out what it's going to do next, it says that teachers who believe that they've had their grants unfairly converted to loans should appeal - first through FedLoan, and then if necessary, through the department's federal student aid ombudsman's office. We have a link to that on our website.
TURNER: That's something Kaitlyn McCollum recently did, and she is now waiting, hoping better news arrives in her mailbox soon. For NPR News, I'm Corey Turner.
ARNOLD: And I'm Chris Arnold.
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