Those unforgiven teacher loans: sorting out the story

Roughly 4,000 Kentucky teachers are being told they'll have to pay off loans that a state agency --the Student Loan People--had promised to pay for them under its "Best in Class" program. Today's Herald-Leader editorial has the basics in a nutshell:

Beginning in the 1990s, Congress significantly upped federal subsidies to lenders who make student loans. This boosted the profits and stock prices of banks. In Kentucky, the non-profit student-loan agency pumped the excess revenue into aid to borrowers studying to work in shortage areas: teachers and counselors, nurses and public service attorneys.
When Democrats took control of Congress in 2006, Congress reduced the subsidies and put the savings into direct student aid, a better use of taxpayers' money. But the flow of dollars into non-profit lenders, including Kentucky's loan forgiveness program, was also disrupted.
About that time the Fletcher administration and legislature raided or redirected almost $90 million from the state student aid agency's reserves and revenue to balance the state budget.

That chronology, though, still leaves a puzzle.

If the Student Loan People assumed that the federal government would send the same money year after year, they were building on sand. They should have known better.

If the Student Loan People knew the feds could not be trusted, and reserved clearly labeled money each year to honor their promises, that's a more responsible story. The state officials who ran off with the money then are the ones who did the harm.

Only, that can't be the full story. The Student Loan people didn't cut off the promises until June 30, 2008. Governor Fletcher's term ended in 2007, and the last Fletcher budget passed in 2006.

How much of this sad story is about bad program planning, and how much of it was good planning undermined by bad legislation? Do we prevent repeats by watching the agency or watching the budget process? I still can't tell.

What I can tell is this. The Best in Class program asked able young adults to step up to urgent work, teaching math and science and foreign languages, and responding to the learning needs of students with disabilities and limited English proficiency. They are delivering for the Commonwealth. The Commonwealth should deliver for them.