Higher Education: Better Management of Federal Grant and Loan Forgiveness Programs for Teachers Needed to Improve Participant Outcomes
Published: 2015-02-24T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Education estimates 430,000 new teachers will be needed by 2020. It administers three programs that may help attract and retain qualified teachers by helping them finance their education. However, little is known about the efficacy of these programs. GAO was asked to examine the TEACH Grant and two loan forgiveness programs.
This report examines (1) the number of current and potential participants in the three teacher aid programs and the extent to which TEACH Grant recipients satisfy grant requirements; (2) what selected schools, teachers, and students identified as benefits and challenges of program participation; and (3) the extent to which Education has taken steps to effectively manage and evaluate these programs. GAO reviewed applicable federal laws, regulations, and documents; analyzed participation data for the past decade; and interviewed stakeholders including agency officials, loan servicers, and students. GAO also held eight non-generalizable focus groups with officials from 58 colleges representing a range of sizes. GAO also reviewed Ombudsman data covering the former and current TEACH Grant servicers from October 2011 to March 2014.
section_title: What GAO Found
paragraphs: More than 410,000 students and teachers have participated in financial aid programs for teachers over the past decade, though GAO estimates 0.8 and 19 percent of the potentially eligible population participates in the Stafford Teacher Loan Forgiveness and Teacher Education Assistance for College and Higher Education (TEACH) Grant programs, respectively. GAO did not develop an estimate for Perkins Loan Teacher Cancellation because U.S. Department of Education (Education) budget documents indicate that federal funds for cancellations were last appropriated in fiscal year 2009. About 36,000 of the TEACH Grant's more than 112,000 recipients have not fulfilled grant requirements, according to GAO's analysis of servicer data, and have had their grants converted to loans, known as grant-to-loan conversions, as required by regulation. Education has a stated goal to take a data-driven approach to better understand its customers, but does not collect information on why recipients do not meet requirements. Absent this data, Education is hindered in taking steps to reduce grant-to-loan conversions and improve participant outcomes.
Key benefits of the TEACH Grant and the two loan forgiveness programs are helping to recruit needed teachers and helping teachers pay for their education, while key challenges include participants' lack of knowledge about the programs' requirements, according to GAO's focus groups with college officials and interviews with other stakeholders. Regarding challenges, college officials said TEACH recipients may have difficulty finding and keeping an eligible teaching position and that annual certification requirements are confusing. GAO's review of data from Education's Federal Student Aid Ombudsman corroborates these challenges: 64 percent of the 212 requests for TEACH assistance from October 2011 through March 2014 cited problems submitting certification paperwork. Further, some college administrators said a key reason their schools do not participate in the program is the grant-to-loan conversion issue.
Education tracks participation in all three programs, but lacks clear, consistent guidance to help recipients understand the TEACH grant-to-loan conversion dispute process. As of September 2014, GAO's analysis of TEACH servicer data shows that 2,252 grants were erroneously converted to loans. Education officials said they now monitor the servicer more closely and plan to review all of the nearly 36,000 of the program's grant-to-loan conversions, but the agency has not systemically reviewed the cause of the errors. Federal internal control standards emphasize ongoing monitoring and absent a review, Education lacks reasonable assurance that it has taken steps to minimize future erroneous conversions. Education established a dispute process to address concerns about TEACH grants converted to loans in error; however, GAO found that Education and the servicer provide incomplete and inconsistent information to recipients about the availability of and criteria for disputing conversions. This is inconsistent with federal internal control standards that highlight effective external communication. Absent clear and complete information, recipients are unlikely to understand the dispute process. Education also has not established performance measures for the three programs nor used available data to systematically evaluate them. Managing for results includes setting meaningful performance goals and measuring progress toward them. Absent those, Education is unlikely to be able to use data to improve program administration and participant outcomes.
section_title: What GAO Recommends
paragraphs: GAO recommends, among other things, that Education assess TEACH Grant participants' failure to meet grant requirements, examine why erroneous TEACH grant-to-loan conversions occurred, disseminate information on the TEACH grant-to-loan dispute process, and establish program performance measures. Education agreed with GAO's recommendations.

section_title: Letter
paragraphs: The U.S. Department of Education (Education) estimates the United  States will need about 430,000 new elementary and secondary teachers  by 2020, particularly in high-need subject areas such as mathematics,  science, and special education. Education administers three programs  that may help attract and retain qualified teachers, particularly in low- income schools, where teacher turnover can be nearly 50 percent higher  than in other schools, by helping prospective and current teachers finance  college and graduate school. The Teacher Education Assistance for  College and Higher Education (TEACH) Grant program, established by  the College Cost Reduction and Access Act, is available to help pay for  the cost of education for undergraduate and graduate students pursuing a  teaching career in high-need subjects at low-income schools. After  graduation, teachers with Stafford or Perkins loans also may be eligible  for loan forgiveness programs if they meet certain requirements, such as  teaching for a certain number of years in a high-need subject or in a low- income school.efficacy of these programs, you asked GAO to review them. This report  addresses the following questions:   However, as little is known about participation in and the  1.  How many students and teachers are potentially eligible for and  participate in the three teacher aid programs, and for the TEACH  Grant program, to what extent are recipients satisfying grant  requirements?  2.  What have selected schools, teachers, and students identified as the  benefits of and challenges with program participation?  3.  To what extent has Education taken steps to effectively manage and  evaluate these programs?
To assess participation in the TEACH Grant, Stafford Teacher Loan  Forgiveness, and Perkins Loan Teacher Cancellation programs, we  reviewed data from the National Student Loan Data System (NSLDS)  from the last decade for the Stafford forgiveness and Perkins cancellation  programs, and from school year 2008-2009 for the TEACH Grant—the  year in which Education first awarded the grants. To determine the  extent to which recipients were satisfying grant requirements, we  assessed participation data from the TEACH Grant servicer, also   These data  beginning with school year 2008-2009 for the same reason.included information on the status of TEACH grant recipients such as the  number of recipients still in school and those that started the service  period. For those in the service period, we reviewed the number of  recipients who have satisfied the grant requirements, those who had their  grant converted to a loan, and those who were teaching or had certified  intent to teach. We compared this and other information about the  TEACH Grant program to Education’s departmental and Federal Student  Aid (FSA) specific strategic planning documents, which outline goals and  objectives both for federal financial aid programs and teacher recruitment  and retention. We developed estimates for the population potentially  eligible for the TEACH Grant and Stafford Teacher Loan Forgiveness  programs by analyzing data from Education’s Integrated Postsecondary  Education Data System (IPEDS) for the 2012-2013 school year and the  Schools and Staffing Survey (SASS) for the 2011-2012 school year, the  most recent years the data were available. We determined that NSLDS,  TEACH Grant servicer, IPEDS, and SASS data are sufficiently reliable for  the purposes of this report by testing it for accuracy and completeness,  reviewing documentation about systems used to produce the data, and  interviewing agency officials.
To describe program benefits and challenges as identified by  stakeholders, we conducted eight focus groups with college officials from  58 colleges and universities—four with officials from institutions that  offered the TEACH Grant program and four with officials from institutions  that did not offer the program. We included college administrators from  institutions that do and do not offer the TEACH Grant program, to gather  a range of perspectives about how well these programs are working and  why institutions chose not to participate. We also conducted in-depth interviews with officials at four colleges participating in the TEACH Grant  program, and individuals enrolled in or recently graduated from teacher  training programs from 21 public and private colleges—over half of which  offered the TEACH Grant program. We selected these schools and  individuals to seek more in-depth information from administrators and  potential participants about program awareness, benefits and challenges,  if applicable, and further insight on why some schools and individuals  chose not to participate. We also interviewed officials from seven higher  education associations and organizations, and the two largest teacher  unions on the benefits and challenges of these programs. We selected  higher education associations and organizations representing a range of  public and private degree granting institutions and organizations that  represent colleges of education and financial aid administrators. While  information obtained from our focus groups and interviews are not  generalizable, they provide valuable insights from college administrators,  students, and teachers about these programs. Additionally, we used data  from Education’s 2012 Baccalaureate and Beyond (B&B) Longitudinal  Study (follow-up to the 2008 survey)—the most recent available—to  develop simulations of a typical teacher’s loan repayment and forgiveness  options using average income and debt levels, and to highlight the  challenges teachers face when making a range of choices about  participating in and the interaction among various loan forgiveness  programs. We also analyzed complaint data from Education’s FSA  Ombudsman from the last three years—October 2011 through March  2014—to learn more about challenges participants face and steps the  agency takes to resolve them. We requested data covering this time  period because it spanned both servicers that managed the TEACH   For the loan forgiveness programs, we reviewed a  Grant program.simple random sample of 100 customer requests out of a possible 825  such requests the Ombudsman received during this time period. The loan  forgiveness sample is generalizable to the population of requests. We  determined that B&B and FSA Ombudsman data are sufficiently reliable  for the purposes of this report. For B&B data, we reviewed documentation  about systems used to produce the data and tested it for accuracy and  completeness. For FSA Ombudsman data, we interviewed agency  officials and reviewed documentation about systems used to produce the  data.
To assess the extent to which Education has taken steps to effectively  manage and evaluate these programs, we reviewed agency planning and  guidance documents; servicer monitoring documents; and information  provided to prospective and current participants; and compared them to  federal internal control standards, GAO’s prior work on performance  measurement and evaluation leading practices, and Education’s  departmental and FSA specific strategic planning documents.all of our objectives, we reviewed relevant federal laws, regulations, and  documents, and interviewed officials with Education’s Office of  Postsecondary Education; Office of Planning, Evaluation, and Policy  Development; Budget Service Office, and FSA. We also interviewed  officials from contracted loan servicing companies that administer aspects  of the TEACH Grant and the Stafford and Perkins loan programs.
We conducted this performance audit from November 2013 to February  2015 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: Education administers three programs—the TEACH Grant, Stafford  Teacher Loan Forgiveness, and Perkins Loan Teacher Cancellation—that  may help attract and retain high-quality teachers in high-need schools  and subjects by helping teachers pay for school.
TEACH Grant. Individual colleges and universities elect whether to  participate in the program and choose the grade levels and education  programs in which students may receive the grant. Students participating  in the TEACH Grant program may generally receive up to $4,000 a year  while in school and must fulfill teaching service requirements after graduation or the grant converts to an unsubsidized Direct Loan.
Stafford Teacher Loan Forgiveness. Teachers who teach for 5  consecutive years in a low-income school can receive up to $5,000 in  loan forgiveness or up to $17,500 if also teaching in certain subjects.
Perkins Loan Teacher Cancellation. Eligible teachers can have up to 100  percent of their Perkins loans cancelled over the course of 5 years of  qualifying service. The maximum annual amount a student can borrow  under the Perkins loan program is generally $5,500 for undergraduates  and $8,000 for graduate and professional students.
Table 1 describes program eligibility, service requirements, benefit  amounts, and participating schools for these three programs, which are  the subject of our review.
20 U.S.C. §§ 1078-10, 1087j. program requirements, may have implications for teacher eligibility for  and benefits under the Stafford Loan Forgiveness program. PSLF was  enacted in 2007 and is meant to encourage individuals to enter and  continue to work full-time in public service jobs, such as teaching, by  offering loan forgiveness to qualified public service employees.
subsections: section_title: Paperwork Requirements
paragraphs: To benefit from these three programs, grant recipients and borrowers  must periodically submit paperwork that verifies eligible employment (see  fig. 1).
Until their service requirement is fulfilled, TEACH grant recipients are  required—per an Agreement to Serve that they sign when in school—to  annually certify that they intend to teach or that they are currently  teaching in a qualified position and school, otherwise their grant will  convert to an unsubsidized Direct Loan. If that happens, the grant  recipient must pay back the full amount of the grant award, plus interest,  which is calculated from the date the TEACH grant was disbursed (see  table 2).requirements.
section_title: Education’s Role in Administering Financial Aid Programs for Teachers
paragraphs: The TEACH Grant and the loan forgiveness programs are administered  by FSA. For all three programs, FSA develops policies and regulations,  provides oversight, and monitors compliance by participants, including  schools, financial entities, loan servicers, and students. FSA is also  responsible for outreach on how to apply for and receive aid. Additionally,  FSA is to develop borrower guidance and maintain StudentAid.gov—a  centralized source for information about federal student aid programs—to  help borrowers and grant recipients understand the repayment process  and the terms and conditions of the programs. In 1998, the FSA  Ombudsman was established to resolve complaints from student loan  borrowers and to make recommendations for improving service within  FSA. According to FSA’s 2014 annual report, the Ombudsman has  received more than 300,000 customer contacts since it began operations  in 1999.
FSA contracts with loan servicers to assist in administering the TEACH  Grant and Stafford loan programs. These loan servicers are independent  entities that provide billing and repayment services, inform borrowers  about their repayment options, and respond to customer service inquiries.  Much of the TEACH Grant program is administered by a single servicer  who manages all active grants and most grants that have been converted  to loans.when their employment certification paperwork is due and send quarterly  interest notices informing grant recipients of the amount they would owe,  including interest, if their grant were to convert to a loan. A borrower’s  Stafford loans are serviced by 1 of 11 FSA-contracted companies. Among  other duties, Stafford servicers process applications for forbearance and  loan forgiveness once a borrower has completed their service obligation.
Among other duties, the servicer is to remind grant recipients  Servicers review applications for eligibility and forward recommendations  for approval to FSA for final review.
In contrast, while FSA is responsible for overall management of the  Perkins loan program, it is campus-based and administered directly by  participating schools. Perkins loans are made directly by schools using a  combination of federal and institutional funds, and borrowers repay these  loans to their school.universities are generally responsible for determining eligibility,  processing applications for benefits and loan deferment, disbursing  benefits and collecting repayments, and advising and providing technical  assistance to borrowers, among other responsibilities.
section_title: Population Potentially Eligible for Teacher Aid Programs Far Exceeds Current Participation, and About One-Third of TEACH Grant Recipients Do Not Satisfy Grant Requirements
subsections: section_title: More Than 410,000 Students and Teachers Received TEACH Grants or Loan Forgiveness and More Could Be Eligible
paragraphs: About one-fourth of the more than 410,000 teacher aid recipients  benefited from TEACH grants. Between school year 2008-2009, when  TEACH grants were first awarded, and October 2014, more than 112,000  students were awarded grants from participating colleges and  universities, according to National Student Loan Data System (NSLDS)  figures. While TEACH Grant participation is decreasing for both  undergraduates and graduates, participation rates among graduate  students are declining at a slightly higher rate, falling 17 percent since   Education conducts analysis for internal  award year 2011 (see fig. 2).purposes, but it has not assessed program participation, including why  participation is declining, as part of any evaluation or study as discussed  later in the report.
About three-fourths of the more than 410,000 teacher aid recipients have  received loan forgiveness or cancellation. Over the past decade, more  than 298,000 teachers have participated in the Stafford Teacher Loan  Forgiveness and the Perkins Loan Teacher Cancellation programs.  Participation in the Stafford Teacher Loan Forgiveness program has  increased each year, benefiting 53 times more participants in fiscal year  2014 than in fiscal year 2004. In contrast, participation in the Perkins  Loan Teacher Cancellation program has decreased significantly—69  percent since fiscal year 2004. The steady decrease from fiscal years  2011 through 2014 may be due at least in part to a lapse in funding.example, according to Education budget documents, Congress last  appropriated federal reimbursements to participating schools for Perkins  loan cancellations in fiscal year 2009.
As no estimates exist of the potentially eligible populations for the TEACH  Grant and Stafford Teacher Loan Forgiveness programs, we developed  estimates by reviewing program requirements and information on  students and teachers from the Integrated Postsecondary Education Data   We  System (IPEDS) and the School and Staffing Survey (SASS). estimated that 19 percent and 0.8 percent of the potentially eligible  population for the TEACH Grant and Stafford Teacher Loan Forgiveness  programs, respectively, are benefiting from these programs. For the  TEACH Grant program, we estimated that in school year 2012-2013  approximately 188,000 students graduated or completed a potentially  eligible program from participating schools and 36,326 students (19  percent) received grants.school year 2011-2012 approximately 3.4 million teachers taught in low- income schools, however some of those teachers may not have eligible   For the Stafford program, we estimated that in  loans or may not yet have taught the required 5 years to receive Stafford  loan forgiveness. According to Education’s data, 27,023 teachers  benefited from the program in fiscal year 2012, representing 0.8 percent  of the estimated 3.4 million teachers in low-income schools that year.  For more information on our methodology, see Appendix I.
section_title: Lack of Awareness About Programs May Affect Participation
paragraphs: Participation in the TEACH Grant and the loan forgiveness programs  might be higher if more teachers and students were aware of them,  according to college administrators in our focus groups, students, and  other stakeholders we interviewed. For example, officials from one higher  education association said that awareness of these programs is low and  that Education does not promote them to potentially eligible students and  teachers. While college administrators in all four of our focus groups with  officials from schools that offer the grants said that colleges inform  students about the TEACH Grant, typically in advising or recruiting  sessions or by speaking directly with qualifying students, more than half  of the 23 students and recent graduates we interviewed said they  received little to no information about the grant, including 9 who attended  schools that offered the program. Awareness of the loan forgiveness  programs appears to be similarly limited. Officials from both teacher  unions, and 6 of 23 students and recent graduates we interviewed, cited a  lack of awareness about teacher loan forgiveness programs. For  example, one recent graduate said she did not know that her Perkins loan  could have been cancelled until she had already paid it off. Participants in  two of the four focus groups that contained financial aid officers also said  that students may not be aware that a Perkins loan can be cancelled.
Education officials stated that they provide information on the TEACH  Grant and the loan forgiveness programs online and through loan  servicers who are in contact with participants during repayment.
Specifically, Education officials said that students are made aware of  these programs via resources such as:  its website (StudentAid.gov);  the master promissory note all students sign when applying for a loan;  and exit counseling, which is conducted by schools when students  graduate.
Education requires institutions and lenders to provide certain information  at various intervals throughout the loan repayment process. Further, while  the Stafford loan servicers we interviewed said they are not required to  advertise loan forgiveness programs, they provide program information to  borrowers on their websites.
While Education makes information on these programs available,  awareness among potential participants continues to be a challenge,  according to college administrators in our focus groups, students, and  other stakeholders we interviewed. Education’s FSA has a stated goal to  actively inform all eligible individuals of their funding options. However, a  senior Education official contended that conducting outreach to promote  these programs to students and teachers may be difficult because the  agency does not capture information on who is teaching and therefore is  unaware of teachers who may be eligible. Another senior Education  official noted that while Education is responsible for awarding student  loans, colleges and teachers’ workplaces also have a role in informing  borrowers about these programs. Nevertheless, senior Education officials  stated that they will continue to consider ways to increase awareness of  teacher loan forgiveness benefits. In the absence of additional outreach  about all three teacher aid programs, however, students and teachers  may be unaware of opportunities to receive financial assistance, and  Education may be missing opportunities to expand the pool of highly  qualified teachers, particularly for low-income schools where retention  has been a challenge.
section_title: Many TEACH Grant Recipients Do Not Satisfy Requirements and Must Repay Their Grants
paragraphs: While most TEACH grant recipients are still enrolled in an eligible teacher  training program or otherwise are fulfilling requirements, about one-third  of recipients have had their grants converted to unsubsidized Direct  Loans because they did not satisfy requirements or requested their grant  be converted, according to data from the TEACH grant servicer (see fig.  3). According to servicer data from August 1, 2013—when the servicer  began tracking this information—through September 30, 2014,  approximately 86 percent of the 12,648 recipients who had their grants  converted to loans during this time frame were involuntary conversions— that is, initiated by the TEACH Grant servicer. Involuntary conversions  occur because recipients do not meet grant requirements, such as not  teaching in a qualified school or subject or not submitting required  documentation verifying eligible employment. The remaining  approximately 14 percent of these recipients voluntarily requested that  their grants be converted to loans. According to servicing officials,  recipients voluntarily requested conversions primarily because they no  longer intended to teach or were not teaching in an eligible school or  subject area.
Despite the significant number of recipients who have not met TEACH  Grant requirements, Education has not taken steps, such as conducting  studies or evaluations, to determine why recipients are not successfully  completing the program. Officials said they conduct analysis for internal  purposes, but said the TEACH Grant program is too new and data is  insufficient for an accurate and beneficial formal evaluation or study.  However, Education could leverage existing data or collect new  information to illuminate the challenges recipients face in meeting  requirements. For example, the TEACH Grant servicer asks all recipients  who voluntarily convert online to provide information on why they chose to  do so (see fig. 4). Analyzing this type of information could better position  Education to make informed decisions about how it might wish to address  these challenges.
The servicer also tracks some information on conversions that it initiates,  such as when a recipient does not respond to certification requests or  submits an incomplete certification form. However, the servicer does not  collect information as to the underlying reasons why a recipient does not  certify. Without collecting this type of information, the servicer and  Education are limited in understanding challenges recipients face meeting  grant requirements and taking steps, to the extent possible, to improve  their experience. Further, Education has a stated goal to take a data- driven approach to better understand its customers and has made  teacher recruitment and retention a priority. However, absent data to  better understand these issues, it will be difficult for Education to improve  student and teacher outcomes and it is likely missing opportunities to  broaden the pool of highly qualified teachers available to teach in high- need subjects and high-need schools.
section_title: Stakeholders Noted Benefits of Teacher Aid Programs, but Students and Teachers Face Challenges Meeting and Understanding Requirements
subsections: section_title: Programs Help Recruit Needed Teachers and Help Them Pay for School
paragraphs: The TEACH Grant and the loan forgiveness programs provide benefits to  students, teachers, and colleges, according to college administrators in  our focus groups, as well as students and other stakeholders we  interviewed. These benefits include:
Helping to recruit teachers, particularly to low-income schools.  College administrators in half of our focus groups with colleges and  universities that offer the TEACH Grant (two of four) said the program  helps them recruit students. One focus group participant noted that  the grant program may be particularly beneficial for education  programs struggling to attract students. Additionally, college  administrators in three of these four focus groups said the program  helps recruit graduates to teach at low-income schools.
Helping students pay for school. Officials from more than half of the  higher education associations we interviewed (four of seven), and  officials from both teacher unions said that the TEACH Grant program  benefits students by helping them fund their education. The loan  forgiveness programs can also reduce student loan debt because a  portion of that debt is forgiven after a participant teaches for the  specified number of years in an eligible school or subject area. This  particularly resonated with financial aid officers in two of the four focus  groups that included financial aid administrators. They said the  Perkins cancellation program in particular is well designed because a  portion of a borrower’s Perkins loan can be cancelled after only 1 year  of service.
section_title: Stakeholders Identified Challenges for TEACH Grant Recipients, Including Finding a Qualifying Job and Understanding Paperwork Requirements
paragraphs: While TEACH Grants help students pay for school, recipients may face  challenges satisfying and understanding grant requirements after they  graduate according to college administrators in our focus groups, as well  as students and other stakeholders we interviewed, and our review of  FSA Ombudsman complaint data.
Finding and keeping an eligible teaching position. College  administrators in three-fourths of our focus groups (six of eight) said  school districts in their states had limited hiring, which could limit a  graduate’s ability to find a qualifying teaching position. Officials from  five of seven higher education associations, representatives from both  teacher unions, and more than half of the students and recent  graduates we interviewed (12 of 23) expressed related concerns  about finding and keeping an eligible teaching position. For example,  one student said that at times it can take a year or two to find a  permanent position, and that the position may not be at a school that  meets TEACH Grant eligibility requirements.
Paperwork requirements. TEACH grant recipients may not  understand annual employment certification requirements, according  to college administrators in our focus groups and our review of FSA  Ombudsman complaint data, putting them at risk of not meeting grant  requirements. College administrators in half of our focus groups with  schools that offer the TEACH Grant program (two of four) said that  students may not fully comprehend the paperwork requirements  associated with the grants after they graduate. Our review of  customer complaint data from the FSA Ombudsman from October  2011 through March 2014 corroborated these concerns. Specifically,  of the 212 requests for assistance the Ombudsman received on the  TEACH Grant program, the majority of these—64 percent—cited  problems submitting annual certification paperwork. The more  common challenges cited included recipients not receiving reminders  that their paperwork was due—as the servicer is required to send—or  asserting that their grant was converted through no fault of their own.  For instance, one participant told the Ombudsman that the servicer  did not process the paperwork she submitted and her grant was  converted to a loan. She said she was told she could file an appeal  but that she should not bother because most appeals are rejected.  Another participant told the Ombudsman she submitted the paperwork  after her first year of teaching but forgot after her second year. As a  result, despite working as a special education teacher in an eligible  school, her grant was converted to a loan.
As a result of challenges that TEACH grant recipients and schools can  face in either meeting grant requirements or administering the program,  some colleges and universities restrict participation or do not offer the  program at all, according to college administrators in our focus groups,  and other stakeholders we interviewed. As freshman and sophomores  tend to change majors more frequently, college administrators in more  than half of the focus groups that offer the TEACH Grant program (three  of four) said that some colleges and universities restrict TEACH Grant  participation to juniors, seniors, or graduate students. Other colleges and  universities have opted not to offer the program at all due to concerns  with their students’ ability to satisfy grant requirements. College  administrators in all four of our focus groups with schools that do not offer  the program said they did not do so because they feared it would put  students at risk of accumulating additional debt if they were unable to  satisfy grant requirements. For instance, one college administrator said  that Education’s early estimates that 75 to 80 percent of TEACH grant  recipients would not meet grant requirements influenced their decision not  to offer the program.some schools considered this rate, among other things, when deciding  not to participate. College administrators also noted concerns about the  grant converting to a loan if a recipient changed to a non-eligible major or  could not find an eligible job after graduation. Officials from a higher  education association representing college financial aid offices said some  schools chose not to offer the program because it was too burdensome  for their schools to administer and expressed concern about the grants  converting to loans if recipients do not fulfill requirements. College   A senior Education official also confirmed that  administrators from two of the four focus groups who offer TEACH grants  also said the program can be burdensome to administer. For instance,  one focus group participant said additional staff time is needed to provide  TEACH Grant specific counseling to students. Another participant  expressed concern about having to provide counseling to students each  year they received a TEACH grant as opposed to other student aid  programs that do not require students to receive counseling with each  disbursement.
section_title: Confusing and Complicated Loan Forgiveness Program Requirements Make Maximizing Benefits Challenging
paragraphs: Loan forgiveness program requirements can be confusing, making it  difficult for teachers to participate in or maximize the benefits from the  Perkins cancellation and Stafford forgiveness programs, according to  stakeholders we interviewed. For example, officials from three institutions  and two Perkins loan servicers said that graduates may not understand  they have to submit an application annually to have 100 percent of their  Perkins loans cancelled. Graduates may also not be aware that they will  lose Perkins cancellation benefits if they choose to consolidate their  Perkins loans with other federal student loans, according to participants in  half of our focus groups with financial aid administrators (two of four). A  Stafford loan servicer said that teachers may also be unaware that  Stafford loans disbursed before 1998 are ineligible for forgiveness. This  concern was corroborated by our review of FSA complaint data: it showed  an estimated 21 percent of the 825 customer contacts received by the  Ombudsman on teacher loan forgiveness programs from October 2011  through March 2014 involved a teacher’s not understanding that an  outstanding balance on a Stafford loan or the age of a loan could affect  his or her eligibility for the Stafford forgiveness program.
Teachers may also not know how requirements for the Stafford loan  forgiveness program affect other programs that may be available to them,  such as Public Service Loan Forgiveness (PSLF), which may make it  difficult to decide which is most beneficial to participate in. For example,  due to federal law governing Stafford loan forgiveness, teachers cannot  count the same teaching service towards both Stafford loan forgiveness  and PSLF. Therefore, qualifying teachers must choose between a set  amount of forgiveness through the Stafford program after 5 years, or wait  and receive a potentially greater amount through PSLF after 10 years.  Loan repayment options can also affect the total amount of loan  forgiveness a teacher could receive across the programs. Stafford loan  borrowers are automatically placed in a standard 10-year repayment plan,  the same length of time needed to qualify for PSLF. Consequently, a  teacher who pays off the loan through the Standard plan would have  repaid the loan in full at the time he is eligible to receive PSLF. If,  however, borrowers choose a repayment plan that spreads the payments  over a longer period of time, they are likely to have a balance to be  forgiven through PSLF at 10 years, provided the borrower qualifies for  lower payments because of income and family size.
Further, decisions about repayment plans and whether to participate in  Stafford loan forgiveness or PSLF, which have to be made soon after  graduation and throughout the life of the loan, can affect a teacher’s total  payment toward the loan, according on our analysis of Education data.For example, a typical teacher at a low-income school with a master’s  degree incurs about $41,500 in federal student loan debt, and would pay  about $57,300 in total loan payments under the default standard 10-year  repayment plan. However, the “typical teacher” in our example could pay  more or less than $57,300 over the life of the loan depending on the  repayment plan and loan forgiveness option he chooses. For example:
A teacher who stays in the standard repayment plan and participates  in Stafford teacher loan forgiveness, would pay about $50,500 but  would have repaid the loan in full at the time he was eligible to receive  PSLF.
A teacher who chose the Income-Based Repayment (IBR) plan, which  has a repayment period up to 25 years, and participates in the  Stafford loan forgiveness program would pay about $56,400.
A teacher who chose the IBR plan and forgoes Stafford teacher loan  forgiveness after 5 years to instead take PSLF after 10 years of  teaching, would pay about $48,500.
As mentioned previously in this report, although information on the loan  forgiveness programs is available on Education’s website and in  resources provided to borrowers while in school, borrowers continue to  struggle to understand how these programs work. Students and teachers,  therefore, may not fully understand their options or the tradeoffs of  participating in one program over another. The Consumer Financial  Protection Bureau (CFPB) has also asserted that the complexity of  financial aid program requirements may act as a deterrent for many   To help teachers and  borrowers weighing a career in public service.others navigate the various loan forgiveness options, CFPB created a  toolkit to help public sector employers educate their staff about loan  forgiveness programs including how the programs interact.
section_title: Education Has Taken Steps to Improve Program Management, but Issues with TEACH Grant-to-Loan Conversions and Communication Remain
subsections: section_title: Education Provides Oversight of the Contracted Servicer and Tracks Participation, but Erroneous Grant-to-Loan Conversions Remain a Management Challenge
paragraphs: Education monitors the servicer contracted to manage the TEACH Grant  program including ensuring the servicer regularly communicates with  recipients, tracking recipients’ progress towards satisfying their grant  requirements, and ensuring the servicer correctly converts TEACH grants  into loans if recipients do not satisfy them, according to Education  officials.reports generated by the servicer and addresses recipient complaints  including disputes regarding grant-to-loan conversion.
Education monitors program participation through monthly  From August 2013 through September 2014, Education and its  contracted TEACH Grant servicer discovered 2,252 recipients had their  grants erroneously converted to loans by the current and previous  servicer due to servicer error. The erroneous conversions were identified  when recipients contacted the current servicer or Education to dispute  their conversion, or when, after investigating specific errors related to  particular loans—some of which were discovered when recipients  disputed their loan conversions—the loan servicer performed system  queries to more systemically investigate these particular errors. The  overall scope of the problem is unknown. Our analysis of servicer data  shows that the majority of the erroneous conversions—56 percent— occurred because the servicer did not give the recipient 30 days from the  final notification to certify that the recipient was teaching or intended to  teach (see fig. 5). Rather, the servicer converted the grant to a loan within  the 30-day window when a recipient is permitted to respond. According to  the current servicer, recipients did not get the full 30 days to submit the  paperwork because of time required to process and mail the letter. The  servicer classified another 19 percent as erroneously converted because,  according to the servicer, a recipient did not understand the terms of the  grant and certification requirements—including paperwork needed to  document teaching service—or the servicer provided inaccurate, unclear,  confusing, or misleading explanations of program and certification  requirements to the recipient.
As a result of the errors discovered to date, Education officials said they  plan to review accounts for all of the approximately 36,000 TEACH grant  recipients who had grants converted to loans by the current and previous  servicer since the program’s inception. Education officials said the review  will include transferring the approximately 2,600 TEACH loans held by  other servicers to the current servicer, but according to officials,  discussions are ongoing and the agency has not yet established a time  frame for when the transfer or overall review will be completed. Federal  internal control standards call for establishing time frames as part of  ongoing monitoring and such time frames would allow Education and  others to assess Education’s progress towards reviewing all recipient  accounts including those currently held by other servicers.
The current servicer managing the program has also taken steps to  address servicer error moving forward. Specifically, the servicer reported  that it now conducts additional system checks and manually reviews all  accounts flagged for conversion to determine whether the required  certification forms were submitted by the recipient according to regulation.  Over the course of 1 month (May 2014), for example, this manual review  prevented erroneous conversions for 108 recipients. Education also  expanded the servicer’s authority, so that it can reconvert loans to grants  in some circumstances without elevating a dispute to Education.  According to the servicer officials, this allowed the servicer to evaluate the  cases more efficiently and contributed to the number of loans reviewed  and reconverted to grants over the past year. According to Education  officials, the high number of recent reconversions from loans back to  grants is the result of addressing errors that occurred in the past under  the previous servicer, and officials do not expect this volume to continue.
In October 2012—about 4 years after the first TEACH grants were  awarded and before the new servicer began managing the program— Education initiated quarterly monitoring of a sample of grants to ensure  they had been appropriately converted to loans. Three of these four  quarterly monitoring reports in fiscal year 2013 did not include  observations of or issues with servicing error, although 541 of the 2,252  (24 percent) erroneous conversions discovered as of September 30, 2014  occurred with the previous servicer. Further, Education provided us with  incomplete documentation regarding how it provided oversight prior to  October 2012. For example, officials said they received quarterly briefings  from the previous servicer on the status of the TEACH Grant portfolio,  including information on grant and loan volume, but they could not locate  documentation for fiscal years 2011 and 2012. While agencies have  flexibility in how they oversee contractor performance, Office of  Management and Budget best practices for contract administration cite  the importance of documenting monitoring activities.
Education officials said that in July 2013, they established a more formal  and comprehensive monitoring process when the new servicer began  managing the program, which includes monthly reports and weekly  meetings. According to officials, Education became aware of the errors  through this increased monitoring, including more detailed system checks  independently initiated by the current servicer. Further, while the current  servicer initiated the majority of the erroneous conversions, some of these  errors may have occurred as a result of inaccurate data provided by the  previous servicer. Officials with the current servicer stated that data  received from the previous servicer contained a large number of  anomalies that resulted in confusion and servicing issues when they  began servicing the contract. As a result, the current servicer said it  proposed a 60-day hold on grant-to-loan conversions (July 23, 2013,  through October 10, 2013) to allow the servicer to work with the data and  give recipients more time to submit required paperwork.
To date, Education and the current servicer have identified, for each  corrected erroneous conversion, whether the error was caused by a data  issue or a communication issue with recipients. However, Education has  not assessed why the data or communication issues occurred or how the  errors went undetected by Education, nor has it outlined plans to do so.  Therefore, we are unable to assess whether the changes Education  made to its monitoring process are sufficient to address any systemic  problems. Further, federal internal control standards highlight the need for  ongoing monitoring and our body of work on performance measures  and evaluations has shown that successful organizations conduct  periodic or ad hoc program evaluations to examine how well a program is  working. These types of evaluations allow agencies to more closely  examine aspects of program operations, factors in the program  environment that may impede or contribute to its success, and the extent  to which the program is operating as intended. Absent a review  examining the underlying cause of the erroneous conversions or plans to  conduct such a review, Education cannot provide reasonable assurance it  has taken steps to minimize the risk of erroneous conversions from  occurring in the future.
section_title: Education Increased Communication About TEACH Grants, but It Lacks Clear, Consistent Policies and Guidance to Help Recipients Understand the Dispute Process
paragraphs: Education has increased its communication with TEACH grant recipients  since the program transitioned to the new servicer in July 2013, including  the servicer sending additional notifications to recipients and providing  more assistance to schools, according to Education officials. Officials said  that while they did not identify specific communication issues with the  previous servicer, they used the transition to a new servicer as an  opportunity to provide recipients with information on the program that is  easier to understand. The current servicer also standardized the  certification form and established a web portal where students can certify  their intent to teach.
Education has also established a process whereby TEACH grant  recipients may appeal to the servicer or Education to dispute a  conversion to a loan, and Education will reverse it if servicer error is  found. However, we found that Education and the servicer provide  incomplete and inconsistent information to recipients about the availability  of and criteria for disputing a grant-to-loan conversion. The servicer’s  website, for example, states that recipients can contact the servicer if they  believe a grant was converted to a loan in error, but does not include the  reasons such a conversion would be deemed erroneous, how the  problem would be rectified, or the criteria considered in the adjudicating  process. Further, all correspondence and policy documents provided to  TEACH grant recipients—including the Agreement to Serve, exit  counseling at graduation, and notification from the servicer that the grant  has converted to a loan—state that once a TEACH grant is converted to a  loan it cannot be reconverted to a grant, which is inconsistent with  Education’s grant-to-loan conversion dispute process.
This incomplete and unclear communication with TEACH grant recipients  about the dispute process is inconsistent with federal internal control  standards. These standards include establishing open and effective external communication. A senior Education official acknowledged  information about the dispute process and what constitutes servicer error  could be valuable to share with grant recipients to ensure they  understand how the program works. Absent clear, consistent, and  complete information about whether loan conversions can be disputed  and what constitutes servicer error, recipients are unlikely to understand  how to navigate the dispute process, criteria on which the dispute  decisions are made, or whether a dispute process even exists.
section_title: Education Has Not Established Performance Measures for TEACH Grant and Loan Forgiveness Programs
paragraphs: Education collects participation data on the loan forgiveness programs for  teachers and the TEACH Grant program and periodically reviews  students’ persistence in pursuing an education degree and teaching  position, but the agency has not established performance measures for  the TEACH Grant or the loan forgiveness programs nor used available  data to systematically evaluate them. Education officials said the TEACH  Grant program is too new to provide meaningful outcome data and  specific metrics for the program are still being determined. Officials added  that data on the loan forgiveness programs is too small for in-depth  analysis. While no cohort of TEACH grant recipients has completed the 8- year service period, available data indicate that one-third of participants  have not met grant requirements or requested their grants be converted.  These programs support Education’s strategic goals of access to and  persistence in higher education programs, and its goal to recruit and  retain effective teachers. Without interim measures, such as evaluating  participation against established benchmarks, it will be difficult for  Education to assess whether the programs are meeting these goals or  gauge performance on an ongoing basis.
GAO-13-518. effective use of high-quality and timely data, including evaluations and  performance measures, throughout the life cycle of policies and  programs. Absent performance measures and efforts to assess progress  towards them, it will be difficult for Education to gauge the programs’  success or use data to improve program administration and participant  outcomes.
section_title: Conclusions
paragraphs: The U.S. Department of Education plays a critical role in ensuring that  children have access to high-quality teachers—particularly in low-income  schools where teacher retention can be a challenge—by managing  financial aid programs that help teachers pay for school. However, while  the TEACH Grant and the loan forgiveness programs could be key drivers  in Education’s efforts to increase teacher recruitment, a current lack of  program awareness among teachers and students may undermine the  agency’s teacher recruitment goals. Without exploring and implementing  ways to increase awareness of these programs, Education is missing an  opportunity to widen the pool of prospective educators and reduce levels  of student debt that may drive teachers away from the profession. By  accepting a TEACH grant award, students make a significant service  commitment to teach in schools and subjects that have the greatest need  for qualified and dedicated teachers. In recognition of this commitment,  Education could take additional steps to ensure that the program is well- managed and give new teachers every opportunity to succeed. While  over 112,000 students have committed to teaching in America’s neediest  schools by accepting a TEACH grant award, a significant portion are not  meeting the terms of the grant. Without a full understanding of why  teachers are not able to meet TEACH Grant service requirements,  Education is hindered from taking mitigating actions to reduce the number  of grant-to-loan conversions and bolster program completion.
The number of erroneously converted grants also signals a clear need for  improved program management, particularly with regard to the grant-to- loan conversion dispute process. Examining the underlying cause of the  erroneous conversions is an important step that will provide Education  with additional assurance the actions it has taken to improve program  management are sufficient. In addition, establishing time frames for  transferring the approximately 2,600 TEACH loans held by other servicers  to the current servicer, and reviewing the accounts for the approximately  36,000 recipients who had their grants converted to loans would allow  Education and others to track the agency’s progress toward more  effectively managing the program. Providing clear, consistent information  about the option to dispute a grant-to-loan conversion, and the criteria for  which a dispute would be considered, would also help teachers who may  have felt deprived of due process better understand the process. A better  understanding of these issues may also encourage colleges and  universities to consider offering TEACH grants to their students. Finally,  without performance measures it will be difficult for Education to assess  whether the TEACH Grant and the loan forgiveness programs are helping  to recruit and retain teachers to high-need schools and subject areas.
section_title: Recommendations for Executive Action
paragraphs: To enhance participation in and strengthen management of federal  student aid programs for teachers, we recommend the Secretary of  Education direct Federal Student Aid’s Chief Operating Officer to take the  following five actions:
Explore and implement ways to raise awareness about the TEACH  Grant and the loan forgiveness programs.
Take steps to determine why participants are not able to meet TEACH  Grant service requirements and examine ways to address those  challenges.
Review the underlying cause of the known erroneous conversions to  ensure steps Education has taken are sufficient to address the  problem, and establish time frames for transferring the approximately  2,600 loan conversions currently with other loan servicers.
Review the TEACH grant-to-loan conversion dispute process and  disseminate to appropriate audiences clear, consistent information on  it, including that recipients have an option to dispute, how to initiate a  dispute, and the specific criteria considered in the adjudicating  process.
Establish program performance measures for the TEACH Grant and  the loan forgiveness programs to assess against established goals  and to inform program administration.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of the report to Education for review and comment.  Education provided us with their written comments, which are reproduced  in Appendix II. Education concurred with our five recommendations and  noted steps it is taking or plans to take to implement them.
As agreed with your offices, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from the  report date. At that time, we will send copies to the Secretary of  Education, relevant congressional committees, and other interested  parties. In addition, the report is available at no charge on the GAO  website at http://www.gao.gov.
If you or your staff have any questions about this report, please contact  me at (617) 788-0580 or nowickij@gao.gov. Contact points for our Offices  of Congressional Relations and Public Affairs may be found on the last  page of this report. GAO staff who made key contributions to this report  are listed in Appendix III.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: The objectives of our report were to examine: (1) how many students and  teachers are potentially eligible for and participate in the three teacher aid  programs, and for the Teacher Education Assistance for College and  Higher Education (TEACH) Grant program, the extent to which recipients  are satisfying grant requirements; (2) what selected schools, teachers,  and students have identified as the benefits of and challenges with  program participation; and (3) to what extent the U.S. Department of  Education (Education) has taken steps to effectively manage and  evaluate these programs. We conducted this performance audit from  November 2013 to February 2015 in accordance with generally accepted  government auditing standards. Those standards require that we plan  and perform the audit to obtain sufficient, appropriate evidence to provide  a reasonable basis for our findings and conclusions based on our audit  objectives. We believe that the evidence obtained provides a reasonable  basis for our findings and conclusions based on our audit objectives.
Federal Agencies, Laws, and Regulations  To inform all of our objectives, we reviewed relevant federal laws,  regulations and documents, and interviewed officials with Education’s  Office of Postsecondary Education; Office of Planning, Evaluation, and  Policy Development; Budget Service Office; and Federal Student Aid  (FSA). In addition to interviews with agency officials, to assess the extent  to which Education has taken steps to effectively manage and evaluate  these programs, we interviewed officials from the loan servicing company  contracted by Education to administer the TEACH Grant program, the two  largest Federal Stafford loan servicers in terms of the number of  borrowers, and two of the larger Federal Perkins loan servicers in terms  of the number of colleges and universities they serve, according to a  higher education association representing schools that offer Perkins  loans. We also reviewed agency policy and planning documents,  guidance provided to various offices within the agency and to the loan  servicers, documentation of servicer monitoring activities, and information  provided to prospective and current participants; we reviewed  documentation from the servicers on program administration and  management and correspondence and other documentation provided to  program participants; and we interviewed officials from the Consumer  Financial Protection Bureau to discuss their work on student debt and  loan forgiveness programs available to teachers and other public sector  employees. We compared this information to federal internal control  standards, GAO’s prior work on performance measurement and  evaluation leading practices, and Education’s departmental and FSA- specific strategic planning documents.
To assess participation in the TEACH Grant, Stafford Teacher Loan  Forgiveness, and Perkins Loan Teacher Cancellation programs, we  reviewed data from Education’s National Student Loan Data System  (NSLDS) from the last decade for the Stafford Forgiveness and Perkins  Cancellation programs, and from school year 2008-2009 for the TEACH  Grant—the first year Education awarded the grants. For the TEACH  Grant program specifically, we determined the extent to which grant  recipients were satisfying requirements by analyzing participation data  from the contracted servicer who administers the program. These data  included information on the status of TEACH grant recipients such as the  number of recipients still in school and those who started the service  period. For those in the service period, we reviewed the number of  recipients who have satisfied the grant requirements, those who had their  grant converted to a loan, and those who were teaching or had certified  intent to teach. We compared this and other information about the  TEACH Grant program to Education’s departmental and FSA-specific  strategic planning documents, which outline goals and objectives both for  federal financial aid programs and teacher recruitment and retention.
To develop estimates for the population that is potentially eligible for  these programs, we analyzed data from Education’s Integrated  Postsecondary Education Data System (IPEDS) and Schools and Staffing  Survey (SASS). For the TEACH Grant program, we analyzed IPEDS  academic program completion data to obtain the number of students who  graduated or completed a potentially eligible program in participating  schools. Specifically, we matched the Office of Postsecondary Education  Identification number of schools that offered TEACH Grants during the  2013 though 2014 academic year to IPEDS completion data for the prior  year because this is the most recent IPEDS data available. We reviewed  the Classification of Instructional Programs codes—which identifies  instructional program specialties within educational institutions—in the  IPEDS Completion Data file for academic year 2012-2013. We identified  96 potentially eligible program types. Schools have discretion to choose  which programs are eligible to participate and the federal government,  states, and local educational agencies have discretion to designate high- needs subjects; therefore we identified programs that could be included in  teacher preparation programs such as general education and secondary  education and teaching. We also included those with a concentration in  math, science, special education, foreign language, bilingual education,  and reading specialists because those programs are specifically listed in  TEACH Grant statute as qualifying subjects. In developing our estimate,  we included those who graduated with qualifying bachelor’s or master’s  degrees and those who completed post-baccalaureate certificate  programs since students graduating with these degree types are also  eligible to receive TEACH Grants. Our analysis of the TEACH Grant  eligible population is limited in a number of ways: (1) schools have  discretion on which students and grade levels are eligible to participate in  the program, therefore not all who graduated from eligible programs could  necessarily apply; (2) students who graduated may also have not reached  or maintained the 3.25 GPA often needed to participate. Further, we only  counted those who graduated from eligible programs, not those who were  enrolled in any given year. We focused on graduating seniors and  graduate students because, according to our focus groups and  interviews, some schools limit eligibility to juniors, seniors, and graduate  students.
To estimate the population of teachers potentially eligible for the Stafford  Teacher Loan Forgiveness program, we reviewed program eligibility  requirements and analyzed SASS data to identify the number of full-time  teachers in public and private low-income schools during the 2011  through 2012 academic year; the most recent year of SASS data  available. Because this is a probability sample, estimates based on this  survey are subject to sampling error. Unless otherwise noted, percentage  estimates based on this survey have 95 percent confidence intervals  within +/- 5 percentage points of the estimate itself. We determined that  NSLDS, SASS, IPEDS, and TEACH Grant servicer data are sufficiently  reliable for the purposes of this report by testing it for accuracy and  completeness, reviewing documentation about systems used to produce  the data, and interviewing agency officials.
To illustrate a typical teacher’s loan repayment and forgiveness options  and the choices teachers must make to take advantage of the forgiveness  programs, we used data from Education’s Baccalaureate and Beyond  Longitudinal Study (B&B) from the 2008 cohort to create a typical teacher  in terms of debt and salary with a master’s degree teaching at a low- income school. The study included approximately 19,000 sample  members interviewed in 2009 and 2012. For the purposes of our analysis,  we focused on responses from the 2012 follow-up for those teachers  teaching at Title I schools who earned their master’s degree because this  survey year includes the most recent debt and salary information  available. Because this is a probability sample, estimates based on this  survey are subject to sampling error. Unless otherwise noted, percentage  estimates based on this survey have 95 percent confidence intervals  within +/- 5 percentage points of the estimate itself. To determine the debt  amount for this typical teacher, we analyzed the cumulative total amount  borrowed in federal loans through 2012 assuming the teacher would  consolidate the federal loans they incurred. We assumed half of their debt  was incurred as an undergraduate and half pursing their master’s degree.  Therefore, when we applied the general Stafford subsidized loan limits to  the overall debt amount ($23,000 for undergraduate and $65,500 for  graduate) the entire debt amount for the typical teacher in our scenario  was subsidized. Because the typical teacher in our example works at a  low-income school, we assumed the teacher would receive $5,000  forgiveness under the Stafford Loan Forgiveness Program. We  determined the salary amount for those teachers by examining the  average initial salary in 2012 and assumed a 5 percent salary growth rate  and a 3.3 percent growth of the poverty threshold to coincide with  assumptions made by Education as part of its repayment calculator. We  also used the Income-Based Repayment (IBR) plan thresholds for loans  made before July 1, 2014; for new loans made on or after July 1, 2014  new IBR thresholds apply. Under these new IBR thresholds, a teacher  with similar income and debt amounts could see larger benefits. We also  assumed a 6.8 percent interest rate because teachers responding to the  B&B survey would have undergraduate and graduate Direct Subsidized  Loans disbursed between July 1, 2006, and June 30, 2012, when that  interest rate applied. Teachers could have had additional loans disbursed  before July 1, 2006, but for ease of reporting, we assumed a consistent  interest rate. We also assumed the teacher would not receive loan  forbearance. We assumed that the teacher was single and without  children (which affects the poverty threshold and the income based  amount due). After discussion with loan servicers, we assumed that even  after the teacher loan forgiveness was applied, the monthly amount due  did not change. This had the effect of shortening the term of the loan.  Finally, we applied the observed loan level and income data to the  various loan forgiveness programs to simulate what the total payments  would be under the different programs. To the extent possible, we  validated our results against the online repayment estimator provided on  Education’s website. These simulations are intended for illustrative  purposes only, as they do not incorporate the experiences of individual  borrowers. For example, individual borrowers may experience periods of  unemployment (reducing income temporarily), or marry and form families  (changing the appropriate poverty threshold). We determined that B&B  data are sufficiently reliable for the purposes of this report by testing it for  accuracy and completeness and reviewing documentation about systems  used to produce the data.
To learn more about the challenges participants face, and the steps  Education has taken to resolve them, we analyzed customer complaint  data from Education’s FSA Ombudsman. We reviewed all 212 customer  requests the Ombudsman received for assistance related to the TEACH  Grant program from October 2011 through March 2014. For the loan  forgiveness programs, we reviewed a simple random sample of 100  customer requests out of a population of 825 such requests the  Ombudsman received from October 2011 through March 2014. The loan  forgiveness sample is generalizable to the population of requests. We  requested data covering this time period because it spanned both   Because we  servicers that managed the TEACH Grant program.followed a probability procedure based on random selections, our sample  is only one of a large number of samples that we might have drawn.  Since each sample could have provided different estimates, we express  our confidence in the precision of our particular sample’s results as a 95  percent confidence interval (e.g., plus or minus 10 percentage points).  This is the interval that would contain the actual population value for 95  percent of the samples we could have drawn. In this report we present  confidence intervals for estimates based on this sample along with the  estimate itself. Using content analysis, we developed categories to  characterize the types of assistance TEACH grant recipients and  borrowers requested or complaints they expressed about the programs.  An analyst then reviewed the requests and recorded each request by  category. These categorizations were verified by a second analyst and  any discrepancies were resolved by both analysts.
To describe program benefits and challenges as identified by  stakeholders, we conducted eight focus groups with administrators from  schools of education and financial aid offices from 58 colleges across the  public, private, and for-profit sectors. The Stafford Teacher Loan  Forgiveness program is administered by servicers contracted by  Education; therefore we did not ask school officials about challenges  administering the program. Four focus groups were with college  administrators whose institutions offered the TEACH Grant program to  their students while the remaining four were with college administrators  whose institutions did not offer the program. These sessions involved  structured small-group discussions designed to gain more in-depth  information about (1) the benefits and challenges associated with the  TEACH Grant and Perkins Loan Teacher Cancellation programs, (2)  outreach and guidance the institutions provided to students or others  about these programs, and (3) any guidance Education provided to these  administrators about the programs. We also asked about program  improvements and to what extent these programs succeed in recruiting  and retaining teachers in high-need subjects and low-income schools.
Consistent with typical focus group methodologies, our design included  multiple groups with varying characteristics but shared one or two  homogenous characteristics. As the primary homogenous characteristic,  each focus group contained either representatives of colleges of  education or financial aid administrators. All but one of the focus groups  involved 6 to 10 participants while the remaining group had 5 participants.  By including college of education representatives and financial aid  administrators from institutions that do and do not offer TEACH grants,  we intended to gather a range of perspectives about how well these  programs are working or why institutions chose not to participate.
To select focus group participants, we obtained membership lists from  professional associations of colleges of education and financial aid  administrators and invited representatives from 235 institutions of higher  education to participate. The primary selection criteria included whether  the institution offered TEACH grants, and, for those that did, the number  of students that received them. To obtain input from a wide variety of  institutions, we also considered the size of the school in terms of total  enrollment and whether the institution was public, private, or for-profit. As  all focus groups were conducted via teleconference, we were able to  include participants from across the United States.
Focus group discussions were structured and guided by a moderator who  used a script with a standardized list of questions to encourage  participants to share their thoughts and experiences. During the sessions,  we informed participants that their names would not be used in the  published report. Each of the eight focus groups was recorded and  transcriptions were created, which served as the record for each group.  Using content analysis, we then evaluated these transcripts to develop  our findings. Our analysis was conducted in three steps. In the first step,  two analysts developed a set of themes and categories to track the  incidence of various responses during focus group sessions. In the  second step, each transcript was tagged by an analyst and recorded by  theme and category. In the third step, these tags were verified by a  second analyst and any discrepancies were resolved by both analysts  agreeing to the tagged theme and category.
Methodologically, focus groups are intended to generate in-depth  information about the reasons for the focus group participants’ attitudes  on specific topics and to offer insights into their concerns about and  support for an issue. Focus groups are not designed to (1) demonstrate  the extent of a problem or to generalize results to a larger population, (2)  develop a consensus to arrive at an agreed-upon plan or make decisions  about what actions to take, or (3) provide statistically representative  samples or reliable quantitative estimates. The projectability of the  information produced by our focus groups is limited for several reasons.  First, the information includes only the responses from college of  education and financial aid administrators from among the eight selected  groups. Second, while the composition of the groups was designed to  ensure a range of stakeholders from institutions of varying size and  geographic diversity, the groups were not randomly sampled. Third,  participants were asked questions about their experiences with the  programs, and other college of education representatives and financial  aid administrators not in the focus groups may have had other  experiences. Because of these limitations, we did not rely entirely on  focus groups, but rather used several different methods to corroborate  and support our findings and conclusions.
In-depth interviews with individual schools. We supplemented  information obtained through focus groups with non-generalizable in- depth interviews with selected representatives of four institutions of higher  education that offered the TEACH Grant program. Specifically, we spoke  with representatives from each of the institutions’ (1) college of education,  (2) financial aid office, and (3) bursar’s office to obtain their perspectives,  particularly regarding the benefits and challenges of administering the  TEACH Grant program. Institutions were primarily chosen based on  whether they offered TEACH grants and, if so, the number of students  who received the grant and whether the school participated in the Perkins  loan program. Secondary selection criteria included whether the  institution was public, private, or for-profit. In advance of each interview,  we reviewed materials each selected institution made publicly available  via their websites including information on the TEACH Grant program.  During interviews, we discussed how these institutions administer and  conduct outreach on the TEACH Grant and Perkins cancellation  programs and the benefits and challenges associated with the programs.
Students and recent graduates. To obtain the students’ perspective  particularly around awareness of the TEACH Grant and the loan  forgiveness programs and their benefits and challenges participating in  them, we spoke with 23 students enrolled in or recently graduated from  teacher training programs at 21 institutions, 14 of whom had attended or  had graduated from institutions that offer TEACH grants. To select  participants, the National Education Association contacted students or  recent graduates on a list of state and national student leaders they  shared with us and requested that each participate in one of two  conference calls. Evidence gained through these group interviews is not  generalizable to all students.
Higher education associations and teacher unions. To gain further  insights on teacher financial aid programs, we interviewed officials from  seven higher education associations and organizations, and the two  largest teacher unions on the benefits and challenges of these programs.  We selected higher education associations and organizations  representing a range of public and private degree granting institutions and  organizations that represent colleges of education and financial aid  administrators including: the American Association of Colleges for  Teacher Education; National Association of Student Financial Aid  Administrators; National Direct Student Loan Coalition; Student Aid  Alliance; American Association of State Colleges and Universities;  Coalition of State University Aid Administrators; and Coalition of Higher  Education Assistance Organizations. We also interviewed representatives  from the two largest national teacher unions: the National Education  Association and the American Federation of Teachers. While information  obtained from these interviews are not generalizable, they provide  valuable insights from college administrators, teachers, and other  stakeholders about these programs.
section_title: Appendix II: Comments from the U.S. Department of Education
section_title: Appendix III: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Janet Mascia, Assistant Director;  Rachel Beers, Analyst-in-Charge; Justin Dunleavy, and Robin Marion  made significant contributions to this report. Also contributing to this  report were Susan Aschoff, Deborah K. Bland, Ben Bolitzer, Alex  Galuten, Stuart Kaufman, John Mingus, Mimi Nguyen, Mark F. Ramage,  Kathleen van Gelder, Walter Vance, and Amber Yancey-Carroll.