Population Potentially Eligible for Teacher Aid Programs Far Exceeds Current Participation, and About One-Third of TEACH Grant Recipients Do Not Satisfy Grant Requirements

		More Than 410,000 Students and Teachers Received TEACH Grants or Loan Forgiveness and More Could Be Eligible

About one-fourth of the more than 410,000 teacher aid recipients  benefited from TEACH grants. Over the past decade, more  than 298,000 teachers have participated in the Stafford Teacher Loan  Forgiveness and the Perkins Loan Teacher Cancellation programs. 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. Helping students pay for school. Finding and keeping an eligible teaching position. 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. 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. Education Has Taken Steps to Improve Program Management, but Issues with TEACH Grant-to-Loan Conversions and Communication Remain

		Education Provides Oversight of the Contracted Servicer and Tracks Participation, but Erroneous Grant-to-Loan Conversions Remain a Management Challenge

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. 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. 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. 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. This incomplete and unclear communication with TEACH grant recipients  about the dispute process is inconsistent with federal internal control  standards. Education Has Not Established Performance Measures for TEACH Grant and Loan Forgiveness Programs

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. 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. 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. 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. Appendix I: Objectives, Scope, and Methodology

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. 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.
Why GAO Did This Study

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.

What GAO Found

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.

What GAO Recommends

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.