Mailbag: A Student Loan Fiasco in Kentucky

Remedies? For starters, how about the Secretary of Education buying old loans from KHESLC, including those with the loan forgiveness provisions, using his ECASLA authority? The resulting savings from elimination of future federal subsidy payments would be used by the Secretary to honor the loan forgiveness commitments and uphold the integrity of federal programs. KHESLC would use the resulting liquidity to reimburse federal taxpayers for what KHESLC owes back, according to the Inspector General, for its illegal claims. Variations on the theme encouraged, prices to be negotiated, and all claims settled.

Alternatively, KHESLC officials could continue to spout foolish statements about greedy teachers, drag the governor further into the mess, try to hold the teachers hostage to lobbying for FFEL in Congress, and make Frankfort, Kentucky, the mismanagement capital of the country.

Thanks again for your interest in helping Kentucky teachers receive the benefits they were promised. I agree with the first remedy regarding the Secretary of Education purchasing old KHESLC loans. However, Kentucky could also consider using some of the state stabilization funding to fulfill the promise of the loan forgiveness program. They could at least reimburse the more than $80 million they took from KHESLC in 2005 and 2006. In order to receive this part of the economic stimulus, states have to show evidence of addressing the teacher quality issue and make sure well-trained teachers are spread throughout the state. I think Kentucky could make a win/win situation out of this if they so choose. KHESLC claims that federal cuts are the main reason for the cuts in the first place, so now that over $2 billion in federal funds is being funneled through Kentucky, there should be no excuse for Kentucky not to make this right.

The only imminent remedy I see is to fulfill the promises teachers were made. Each year we, as teachers, promise to educate our students. We have been dutifully working to fulfill our contracts. We have kept our end of the bargain. Fulfilling the promise of complete loan forgiveness for five years teaching is the only remedy I can fathom. At this point, I don't care from where it comes.

As a math teacher, if one of my students wants to solve an equation of some sort, there has to be some willingness to go through with the process in order to get the result. My students who are unsuccessful usually began without any willingness to even look at the problem. They ask questions like "why do we need this stuff?". And when they are finally motivated to take a shot at it, they become very sluggish and resentful in their approach. And then, when they do fail, they want to blame it on the teacher. They do not comprehend that it was their lack of desire that led to their failure.

 Ironically, the same attitude is taking place here with our government. Most of our politicians and other powers don't even want to look at this problem. It, perhaps, gives them a headache. And maybe it makes them say things like, "Why do we need to do this? Most of them are going to keep teaching anyway." And when they do finally succumb to any pressure to solve the problem, they take a sluggish approach to any potential resolution. They do just enough to make it look like they are doing something. They pacify members of the media, all-the-while waiting for that proverbial bell to ring. And then, when no solution is obtained, or when an unsuccesful attempt is exposed, what do they do? They blame the teacher. They tell us that we are asking for too much. They call us names like "funny" and say that we wine too much.

Yes, wining and sarcasm may be some teacher's survival traits, but we just want to see the problem solved. We just want everyone to experience that feeling one gets when a difficult problem is seen through from the beginning to the end, and solved. So, when asked what can be done to remedy this situation, my answer is the same as Jaime Escalantes' in that math movie "Stand and Deliver". One must have ganas; desire. Like the writer before me wrote: Where there's a will there's a way. We simply need our government officials and The Student Loan People to open their hearts to this falsehood that was committed against us. Once this simple act of empathy takes place, I believe we will see that there are many people who will have the ganas to help. Without that, this problem will remain unsolved. DMH

For starters, I'd like to know that someone is listening. Our congressmen, on the federal and state levels, have given little to no indication that they have concern for the hardship that has been wrought on so many Kentucky educators through a broken promise made by the very government for whom we all work. Let us hear their voice on the situation. Let us know that they are aware, and that they are taking action to eliminate these hardships that they themselves have created.

My whole family has been affected by lies of The Student Loan People. Both of my parents are teachers and they used the program to help further their education in their teaching fields. I used the program so that I could receive the proper education necessary to become a teacher. When I was deciding on a college career the promises of The Student Loan People, played a very large role in the decision I ultimately made and now it is costing me severely.

About a year and a half ago I purchased a home and for the first year I was fine making my payments, now due to the loan payments I am having to make I can barely afford my house. I am a math teacher so obviously I planned out a budget for myself. What I didn't take into account was the nearly $500 a month in loan playments I was going to have to pay. So to pay my bills I got a second job during the school year tutoring and now I am forced into getting a summer job. Thanks to my two jobs, every month I break even on my bills. I am not sure how long I will be capable of work these types of hours.

When you put all your heart into teaching everyday it can be very taxing, but when you have the thoughts of multiple jobs after your teaching day is done, which it never really is, it can make it almost impossible to focus clearly on teaching. I just hope we can find a solution before it's too late. I believe we are facing a situation where there is a great potential for losing many fine young teachers, due to the lies of The Student Loan People.

I and others have posted before about the broken promises and that in my opinioin is indisputable. I would like to however comment about another aspect of this program.

Lenders, as far as I know, are required by law to compete ethically and fairly. Was it fair for the Student Loan People to offer loans with the promise of repayment? What was their motivation? Greed. Plain and simple. They opperated under a federal loophole that allowed them to rake in fantastic profits,and when the congress slammed everybodies fingers in the cookie jar with the 9.5 percent loans they got nailed. My point is THOUSANDS of students took out loans with the Student Loan People, instead of other lenders because of the promises they made. It seems like Sallie Mae, or Chase, or a host of other companies should consider an anti-trust or collusion based lawsuit.

Collusion you say? Who did they collude with?

All of the schools in Louisville that worked with this program pushed the Student Loan People exclusively when talking financial aid. Why? Because putting butts in seats at their university was the main goal. Worried about paying back these loans, don't, we've got you covered with the student loan people. Haven't heard of the program, well let me tell you it will pay for all of your education, now enroll in class so I can keep my job. *smile*

This program made a lot of people a lot of money, and when it went south all parties who made a lot of money just want to shrug their shoulders and deny responsibility. Greed, same as AIG.

It was evident that many teachers (Including myself) was duped into taking large amount of loans to pay for the expenses of going back to school. The best solution is for someone (KHESLC or Department of Education) to reimburse those teachers for the amounts of the loans that were incurred (I.E. Total loan forgiveness). President Obama has floated around nearly $1 trillion dollars to help the economy, we only need <0.01% of those stimulus dollars to eradicate the entire Best in Class indebtedness.

In our current economy, it is astounding how little attention has been paid to a financial problem beyond the mortgage and Wall Street crisis that threatens to bankrupt a generation: the student loan crisis. There has been substantial report in the media about the incredible rising cost of a higher education, so much so that the government has actually responded to the needs of those who still have their college education in front of them. But what about the huge need of all those who have already invested so much into the president's voiced goal of widespread college education?

The federal government has invested billions of dollars into companies that had bankrupted themselves, only to delay their bankruptcy by a few months. They reward bad decisions of those entities that have a listing with the NYSE, but for those who merely have our own initials to speak for us, we are left with the impression that our tax dollars are not meant to help us. Our difficulties have not been caused, however, by bad decisions, but rather by the failed promises of our state government. The president and secretary have voiced goals of widespread college education for all, do they really expect that goal to be realized when college graduates are faced with bankruptcy?

There are billions of dollars from the recent stimulus plan that now are being evaluated as unnecessary. I call on Congress,  the sec'y of ed, and president to finally face this problem for what it is and divert these funds to aiding those with massive student loan debt, particularly those in fields of public service; not in ten years as is so often the case, but now.

 I realize the federal government doesn't appreciate the concept of paying back its loans so ten years or even a hundred is inconsequential, because it acts as though it never has to pay its own; but as for the rest of us, our bills are due monthly.

Is it possible that the collapse of the financial markets might have had something to do with all this? The market for tax exempt bonds issued by state agencies like KHESLC dried up because of the subprime mortgage mess. As a result the cost of these bonds rose dramatically and much of the reserves that were likely intended to fund these forgiveness and rate reduction programs had to be paid the the bond holders.

Non-profit agencies, county governments and others are trapped in a bond market that is NOT working. State and local governments are forced to paying higher prices for debt they previously issued. Taxpayers and students are suffering as a result. There is plenty of blame to go around. The bottomline is that no one planned for a rainy day - not KHESLC and certainly not the federal government.

Some believe student loan programs should be run by the federal government not banks and non-profit agencies. New America certainly loves the idea of a government run monopoly - because they work so well. Right? But look at the actual long term possibilities. What happens when the cost of Treasury bonds increase and the "savings" that the CBO has projected dry up. Where will the money come for the proposed Pell Grant entitlement? Who is planning for that rainy day?

Higher education needs serious attention. We need to keep the cost of college low, help students get degrees and jobs while reducing the national deficit. To accomplish this HUGE endeavor policy makers must take time to develop a long term plan by listening to colleges, students, parents, banks, employers and others. It is a daunting task. Certainly, the idea of making the Pell Grant an entitlement is policially appealing. But it does not solve the bigger problem. It's kinda of like selecting Sarah Palin as your running mate. You get a lot of media attention but in the end you may create a bigger problem.

The state and federal government should share the responsibility of paying for these loans and, amazingly enough, it would only cost $134 million dollars for them to keep their promises. While this sounds like a lot of money, it's only $67 million dollars when split between the two. Paid over the course of 5 years, and we're talking about $13.5 million each. Still a large sum of money, but not that large when you consider that Jefferson County's budget last year eclipsed 1 BILLION and the national debt is upwards of 10 TRILLION. The money is there. They need to take the time to find it.

As a math teacher, if one of my students wants to solve an equation of some sort, there has to be some willingness to go through with the process in order to get the result. My students who are unsuccessful usually began without any willingness to even look at the problem. They ask questions like "why do we need this stuff?". And when they are finally motivated to take a shot at it, they become very sluggish and resentful in their approach. And then, when they do fail, they want to blame it on the teacher. They do not comprehend that it was their lack of desire that led to their failure. Ironically, the same attitude is taking place here with our government. Most of our politicians and other powers don't even want to look at this problem. It, perhaps, gives them a headache. And maybe it makes them say things like, "Why do we need to do this? Most of them are going to keep teaching anyway." And when they do finally succumb to any pressure to solve the problem, they take a sluggish approach to any potential resolution. They do just enough to make it look like they are doing something. They pacify members of the media, all-the-while waiting for that proverbial bell to ring. And then, when no solution is obtained, or when an unsuccesful attempt is exposed, what do they do? They blame the teacher. They tell us that we are asking for too much. They call us names like "funny" and say that we wine too much. Yes, wining and sarcasm may be some teacher's survival traits, but we just want to see the problem solved. We just want everyone to experience that feeling one gets when a difficult problem is seen through from the beginning to the end, and solved. So, when asked what can be done to remedy this situation, my answer is the same as Jaime Escalantes' in that math movie "Stand and Deliver". One must have ganas; desire. Like the writer before me wrote: Where there's a will there's a way. We simply need our government officials and The Student Loan People to open their hearts to this falsehood that was committed against us. Once this simple act of empathy takes place, I believe we will see that there are many people who will have the ganas to help. Without that, this problem will remain unsolved.

DMH

Our federal politicians have done absolutely nothing to fix this horrible situation except for lip service. I have personally contacted them all on numerous occasions, and various methods, but all I get are vague responses, and usually putting the blame some place else. KY House bill 480 (Thanks Mr. Yonts) helped out, but our Governor could provide some job stimulus money to help fulfill the commonwealth's promise to it's teachers, and in so doing save jobs. He could return the $90 million the previous administration, and legislature took from KHEAA to balance the budget. One, or all, in a bi-partisan effort, of our federal politicians could sponsor legislation to re-fund the public service loan forgiveness programs for KY, or even nationally. I think it would get overwhelming support. Finally, the federal executive branch especially the DOE could directly provide assistance, or with the support of President Obama request funds from the Treasury department for loan forgiveness. Unfortunately, I have personally contacted several of our federal executives once again on numerous occasions, and by various methods and I have never once even received a generic reply from one of their staff people. But I'll continue doing so because there is an awful lot going on, and time will tell. We all just have to stay on them, and keep appealing for some real debt relief.

Plain and simple. The Loans should be paid for these students as promised. The politicians who were elected to represent the people and who while campaigning put education first should come out of hiding and truly represent these students and get these loans forgiven.

I was also one of the naive individuals who believed that my loans would be forgiven after speaking with a loan representative and by the college that I attended. The representative at the college stated, "your loans will be covered through July 2008, after that the Best In Class loans will no longer be available". I do not know where the money is going to come from however this injustice must be corrected. If this is not corrected, what is next? Who will be the next victim? In the big picture, how can we as a society compete in this global economy if issues such as this are not corrected? What about the slogan "Education Pays"? The importance of educating our children must be more important than words spit out of our mouths when we need votes. I wish that I had the power to change this injustice that not only happened to me but also the thousands of teachers involved. I am so sorry to all of you and hope that someone will have the backbone to step up and correct this mess! Thank you Stephen Burd for the attention!

Thanks Higher Ed Watch for continuing to pursue this story. I keep thinking that when the facts are known, someone on the federal or state level will take action to help us. I am like most of the other posters - left a much more lucrative position to become a teacher. A 50% pay cut basically forced me to continue until I completed my Rank I to maximize earning potential. I am now an ESL teacher. Every decision I made regarding becoming a teacher, choice of programs, choice of universities, choice of time spent in grad. school, etc. would have been different if the Student Loan people had not promised me forgiveness. Now, I am a teacher who loves her job, but cannot afford to pay both her mortgage and her $700.00+ a month loan payment. Extended repayment options help, but now I am carrying a 25 year debt that I was promised I would never have to pay. Ouch.

We need to give credit however, where credit is due. KY Congressman Brett Guthrie has recently contacted Secretary Duncan on our behalf. Due in part to the deluge of phone calls and emails his office received after he bypassed an opportunity to speak with the Secretary about this issue a few weeks ago. A delayed effort, but at least he is making an effort. The Student Loan people are going to have to pay someone back to atone for the money they received unethically. I think they should use the money intended for "payback" to pay the teachers who've been hurt by their program (i.e. forgive the loans as promised). And they need to STOP advertising the program. If you go to their website, you can still find information there that would lead you to believe you can still get loan forgiveness. How incredibly irresponsible.

I am also a teacher (special education) affected by the Best in Class program. I received my undergraduate degree in special education. I received grants for my undergraduate degree and did not take out any student loans. However, when I began teaching, I HAD to go back and get my masters degree (a requirement by Kentucky). I received student loans for my masters degree and now I am over $33,000 in debt. It makes me sick to think back when I was totally debt free just over 2 years ago and now have this huge financial burden hanging over my head. It makes me wish I had NEVER began teaching. I feel tricked by this program (Best in class). I know there is money available to fix this problem. If there is money to bail out auto industries that are going broke, then why can we not be"bailed out" on our loans that was promised to us to begin with?

This entire situation has been very upsetting because what should have been a great career experience has turned out to be some what of a nightmare for me as well as so many of Kentucky's great educators. Not only has it been a great hardship on everyone's finances, but it has also been sad to learn that such a promise has been broken. As for a way to fix the problem, I really think those already involved in the program should have their loans forgiven in the time frame as promised (20% each year)then simply don't offer the program to anyone newly entering the field. I also want to take this opportunity to thank Justin and all teachers who have actively been participating in getting this problem "fixed". I know it has been very frustrating for all.

I went back to school to become a teacher because the SLP said the loans would be covered and every time I called them they told me that the program was in good shape. Next year will complete my 5 years of service and may loans were suppose to be paid for. Instead, I have more debt that I would have ever dreamed i could run up! Then, my husband went back to school to teach science and together our payments will be to the tune of over $1000.00. I'm embarrassed to tell anyone about my personal debt because i feel some sort of responsibility in letting myself get dupped. Other than a house and cars, my husband and i don't have any other debt and yet i feel like i can hardly breathe while waiting for politicians to get in the game and actually do something. I just don't get it! Personally, I want these Best in Class accounts frozen while an investigation is being conducted. Best in Class teachers should not have to suffer financially every month when they acted in good faith. The consequence should fall to those who committed the crimes, not to the teachers.

Makes for interesting story but misses some important facts as usual. The author is a pretty good fiction writer. Kentucky provided the teacher benefits prior to the 9.5 loans and after so it seems more than a stretch that the 9.5 loans was the cause of the benefits being curbed.