Background: The Best in Class loan debacle has left more than 4,000 Kentucky educators paying off loans they expected would be forgiven by the Student Loan People. One key issue is whether the Student Loan People really made that promise, or whether it consistently told borrowers that the program could be canceled at any time. On January 11, 2005, KHEAA issued a report on Student Benefits from the Student Loan People: FY 2003-2004. You can download the full document here, but check out the sample to the left.
"Interest is forgiven at the end of each academic year" surely describes a program expected to last.
"Up to 20% of the loan can be forgiven each year" also sounds precisely like an ongoing program.
"Teachers can eliminate their entire student loan debt" comes with no warnings at all that the program itself might not last for the five years in question.
Yes, it was a promise. Yes, it was reasonable for teachers to rely on it. Yes, the only reasonable thing now, the only decent thing left, is for the rest of us to make sure the promise is kept.
This is a heartbreaking story. Gov. Beshear needs to step up and do the right thing. Every legislator needs to step up and do the right thing. KEA,JCTA, and whomever else needs to step up and call in all their election funding favors and do the right thing for these teachers.
ReplyDeleteThere is no doubt in my mind that morally and ethically these loans must be paid. Susan, does Obama's stimulus package include any money for loan repayment like this? In other words, could the state use some of that funding to cover this shortfall? According to the Student Loan People's Website they're a municipal corporation, so it would also be interesting to see the terms that were agreed to between the parties to get a clearer understanding of what promissory estoppel claims might be made against them or the municipality.
ReplyDeleteI don't see a direct way to use stimulus money, but I do see an indirect way: a bait-and-switch with the fiscal stabilization money. The rules for that are that the state must at least maintain its 2006 funding. We've done more than 2006 in 2007, 2008, and 2009--unlike many other states. So we could lower our state effort closer to 2006, knowing that the stimulus money will more than replace those dollars, and then have STATE dollars available to pay the loans.
ReplyDeleteThe political hazard of this is that many governors are already planning their bait-and-switch, and ours has to be thinking through how to juggle the dollars and needs. So, moving money around to pay the loans means not being able to move it for something else--which will no tbe fun for the governor or for others who might otherwise have been helped.
Susan, I just read a story from the KSBA headlines about Nelson County eliminating the art and music teachers in their school because of funding. I am sure it was a logical choice since we are not testing in these areas. Is this the start of the demise of the arts in Kentucky schools as we have come to know it? Since it is staffing and budget time, how many more SBDM's are following suit?
ReplyDeleteSusan,
ReplyDeleteI also remember that there was a similar loan forgiveness program for students who wanted to attend law school to become a public defender. Are those students suffering the same fate? Was there the same promise as the Best in Class?
The Best in Law participants are suffering the same fate.
ReplyDeleteMy hunch is that lawyers, too, were reading things that gave them every reason to think they could count on the program for the future, but I haven't found any proof of that.
To Whom It May Concern:
ReplyDeleteHello. My name is Michael. I decided four years ago to go back to college to get my masters in special education because colleges across the state recruited for online classes for special education degrees, there was a need for special education teachers, and I was under the impression that my loan would be paid back 20% each year for five years that I taught until my loan was paid off. From that point forward, the percentage of reduction has decreased to pretty much nothing. It looks like we are going to have to pay our own loan back since we were mislead by someone, but I don’t think anyone is really going to take the blame for it. I got my Special Education Degree, completed my KTIP, all of my evaluations have been really good, and I have taught for four years in Madison County. I lack one month and the first day of teaching the next school year to get my tenured and not have to be worried about being pink slipped because of budget cuts. I have loved and enjoyed my four years of teaching, but before I left school this past Friday, my principal pulled me to the side and told me that she was giving me my verbal pink slip because some person who worked at our school as a Guidance Counselor that has been working for KDE is coming back to our district. So, our Guidance Counselor has a Special Education Degree and she will be put in my spot, which puts me out of a job. I guess this is because of budget cuts, but I’m not for sure. I didn’t have, nor do I have now any way to pay off my loan. I am asking for your support to help people like me who have been put in this bad situation to help us pay off our student loans. I appreciate your time.
Michael
My husband just recently graduated and had signed up for the Best In Class Loan. Does anyone know where we stand with this? Is there any money being offered? Thanks
ReplyDeleteTausha, there's some money being distributed each year,but nowhere near what's been promised. If you send me an e-mail (click on my name to get to my profile and address), I can ask the folks who have been tracking this more closely to get in touch with you.
ReplyDeleteHas there been any progress?
ReplyDeleteI haven't heard any whisper of an effort to make this right!
ReplyDeleteSo, is the Best In Class repayment forgiveness not functioning to this past year? We usually filed in March of each year.I received it last year.Kent
ReplyDeleteHi Kent,
ReplyDeleteI'm behind the times on this one, and simply don't know. As you can see, my original post is from April 2009, very close to two years old. I'll see what I can find out, though, and if you get word another way, do share?
Unfortunately, the only loan forgiveness for teachers comes with so many restrictions that many do not qualify. If you have any outstanding loans prior to 1998, you do not qualify, even IF you are paying those off separately. And with the way the loan company has the loans set up, it is quite easy to see which loans to apply the forgiveness to. Pure and simply I feel this is a scam and certainly makes it difficult to remain in such a low paying position while paying back loans that were not budgeted.
ReplyDeleteI took out loans to fund my teacher education, relying on the Kentucky law that stipulates no Emergency Certificates could be issued if a highly qualified applicant was available. I failed to obtain a teaching position, because schools were being granted Emergency Certificates in order to continue to higher their relatives! I am on the hook for my entire loan, due to the states failure to enforce it's own laws. I feel as if I was misinformed, too, so the state could benefit from the interest on the loan. I would not have taken this loan out if I had known that it was really a scam.
ReplyDeleteMy wife and I are drowning in student loan debt, thanks to this program. She have paid off more than half, but still owe something around $18,000. It is deferred for now, but interest in accumulating. Yet another financial disappointment from the Commonwealth of Kentucky!
ReplyDelete