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GAO: A Third of TEACH Grants Convert to Loans. But Why?

About a third of the grants awarded under a federal program to encourage teacher-candidates to work in low-income schools end up being coverted to loans, the Government Accountability Office said in a report issued March 26. But the U.S. Department of Education doesn't collect data on why those recipients failed to meet their service requirements, the agency found. 

The Teacher Education Assistance for College and Higher Education, or TEACH grant, was created in 2007. Teacher-candidates can receive up to $4,000 a year to complete their preparation, but that aid becomes an unsubsidized loan if they don't complete the service requirement of four years of teaching a high-need subject in a low-income school. 

The GAO notes that the Education Department does not collect data or conduct evaluations to figure out why grant recipients fail to meet the requirements, even though there is some available data from the loan servicer on this topic.

Its analysis of the conversion rate on TEACH grants is similar to an independent analysis conducted earlier this year by Third Way, a centrist think tank. 

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The program itself has come under a lot of criticism because of its complexity. As the GAO notes, there's a great deal of paperwork involved in the grant. Recipients have to file forms annually to prove they're teaching, or planning to teach, to maintain the grant. College administrators interviewed said that many teachers aren't aware of the grant or find its conditions confusing.

Indeed, the GAO found that the TEACH grant has been falling in popularity in recent years. And financial-aid officers, in the agency's focus groups, appeared to prefer the Perkins loan-cancellation program, which begins to cancel a candidate's loan after just one year of teaching service.

As of Sept. 2014, about 2,250 grants were also erroneously converted to loans, the GAO found, largely the fault of the loan servicer at the time.

The GAO concludes that the Education Department needs to step up investigation of these erroneous conversions, and to do more to understand what obstacles recipients face that contribute to the high conversion rates. The Education Department, in response, said it agreed with the findings.

The report comes during a period of increased scrutiny for the TEACH grant. Under its proposed (and unpopular) teacher-preparation regulations, the Education Department plans to withhold TEACH grants from teachers' colleges whose graduates aren't going on to improve student learning.

Also worth noting: The converstion figure of a third of the grants cited by the GAO is much lower than the 75 to 80 percent the Education Department has estimated in its budget documents in the past.


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