Last week, we ran a post critiquing The New York Times' coverage of the collapse of a popular student loan forgiveness program in Kentucky that was designed to encourage students to become school teachers. We credited the Times for bringing national attention to the struggles of thousands of newly-minted teachers who were left in the lurch when the Kentucky Higher Education Student Loan Corporation (KHESLC), the state's nonprofit student loan agency, decided to pull the plug on its "Best in Class" program. But we took the newspaper to task for missing the real story: how officials at the Kentucky loan agency had set the program up for failure by financing it with funds it had improperly obtained by engaging in a risky scheme to overcharge the federal government tens of millions of dollars.

Since then, we have been overwhelmed by the responses we have received on the post. Nearly 100 Kentucky teachers have written to us, explaining the hardships they have faced since the loan agency shut down the program. Today, we thought we'd put a human face on the scandal by printing excerpts from comments we received from the teachers.

Drawn to Public Service by a Promise

The stories they tell are remarkably similar -- about how they were drawn to public service by the promise of having their student loans forgiven. Most of these people, many of whom left other lines of work to take part in the program, say that they never would have been able to consider entering such a low-paying field without the help that the Kentucky loan agency [also known as the Student Loan People (SLP)] offered them:

As the student loan industry mobilizes to battle the Obama administration over the President's plan to eliminate the Federal Family Education Loan (FFEL) program, we are starting to hear a lot from lenders about the superior customer service that the bank-based program allegedly provides. "Direct Loans are simply not subject to the same quality of service," Marcia Sullivan, director of government relations at the Consumer Bankers Association, recently told The New York Times.

Are these claims true? We really can't say since there haven't been any empirical studies comparing the level of customer service offered by the two federal student loan programs. But we are skeptical about the quality of service private lenders are providing, because of comments we have received over the past two years from federal and private student loan borrowers who have complained about their dealings with Sallie Mae, the nation's largest student loan company.

Given the heated battle that is just getting started on Capitol Hill, we thought we'd share some of these comments with you.

We have heard, for instance, from many borrowers who complained that they could not get straight answers from Sallie Mae customer service representatives about how much they owed. One such comment came from a father who had co-signed his son's private loans:

At Higher Ed Watch, we have long opposed the idea of the government bailing out private lenders who have engaged in predatory private student loan practices. Our view, as we have said before, is that student loan companies should have to bear responsibility for the consequences of pushing high cost private loan debt on high-risk borrowers. After all, for years, they gladly raked in profits from these loans.

Over the past six months, we have heard from scores of financially distressed borrowers who are outraged that the government would rush to the aid of private student loan providers without offering any relief to them. With U.S. Treasury Department officials preparing to start carrying out this month their plans for reviving the credit markets to help provide capital and liquidity to lenders so they can continue making high-cost private loans, we feel that it is our duty to make sure these voices are heard.

Typically in our mailbags, we provide a sample of comments that have been submitted on a given subject. But as we sifted through the dozens of comments we have received in recent months, one particularly caught our eye because it perfectly illustrates the human costs of a system that has left so many students vulnerable to abuse from predatory lenders and unscrupulous trade schools.

Yesterday, we expressed our strong opposition to a Bush administration proposal that would potentially bailout lenders who have engaged in predatory private student loan practices. Our view is that student loan companies should have to bear responsibility for the consequences of pushing high-cost private loan debt on high risk borrowers. After all, for years, they gladly raked in profits from these loans.

At Higher Ed Watch, we hear regularly from financially distressed private student loan borrowers who believe they have been victimized by lenders (see here and here). Of late, we have received many comments from borrowers who are struggling to repay private loans they received from the student loan giant Sallie Mae to attend for-profit trade schools of questionable quality. Given the debate occurring on Capitol Hill, we thought we'd share some of those comments with you.

At Higher Ed Watch, we hear regularly from financially-distressed borrowers with private student loans who believe they have been victimized by lenders' predatory practices. Much of that feedback comes in the way comments we continue to receive on blog posts that ran more than a year ago.

At a time when the federal government is providing a major bailout of the student loan industry, we think it is important to highlight the experiences of borrowers who are struggling with unmanageable levels of high-cost, private student loan debt. Surely borrowers such as these could use a helping hand too.

In recent years, undergraduates have become increasingly reliant on expensive private student loans, which unlike federal loans, have uncapped interest rates that vary month to month based on market conditions. They also offer less flexible repayment options…

Note: This post pre-dates Higher Ed Watch's shift to a new publishing system. For the complete original post, including any comments, please click here.

From the start of Higher Ed Watch in September 2006, we have focused a healthy amount of attention on the non-profit company EduCap, which until recently marketed private student loans under the brand name Loan to Learn. The company, which is owned by the Washington, DC socialite Catherine B. Reynolds, shut down…

Note: This post pre-dates Higher Ed Watch's shift to a new publishing system. For the complete original post, including any comments, please click here.

Readers comment on items weeks or even months after a post first appears, and we fear that some may miss valuable and interesting feedback. So from time to time, we at Higher Ed Watch are going to highlight moving, thoughtful, and sometimes incendiary comments that we have received on…

Note: This post pre-dates Higher Ed Watch's shift to a new publishing system. For the complete original post, including any comments, please click here.