Broken Promises and Debt Pile Up as Loan Forgiveness Goes Astray

The department pointed to a number of efforts underway to improve the problem. The “Next Gen” project — a planned technology overhaul of the agency’s loan servicing system — will, it says, allow for better oversight. This month, Betsy DeVos, the education secretary, personally summoned executives from loan servicers for the first of quarterly meetings about performance standards.

“When servicers fail, we fail, and our customers deserve more,” said a department spokeswoman, Angela Morabito.

Department officials told Congress that they also launched an aggressive information and outreach campaign to better communicate the program’s requirements to borrowers.

In April, the Education Department sent the Pennsylvania Higher Education Assistance Agency a written warning that said its call center performance was “wholly unacceptable.”

Keith New, a spokesman for the loan servicer, said it “believes in” the Public Service Loan Forgiveness program and “works tirelessly to help borrowers navigate the program’s complexities.” He added that the Pennsylvania Higher Education Assistance Agency “services the program in accordance with program rules and federal law.”

Under those rules, some borrowers expect they will die with their debt.

A native of Akron, Ohio, Ms. Finlaw, 36, attended a small, private college in Indiana and then graduate school in Philadelphia, where she earned a master’s degree in urban studies. Raised by a mother who had to work multiple jobs to make ends meet, Ms. Finlaw had no choice but to take out loans to pay for school. She was the first in her family to graduate from college.

She religiously made her payments, provided the paperwork to show she remained a teacher and was repeatedly told that she was on track. When her loan servicer, Nelnet, said in spring 2017 that she was eligible to apply for the loan forgiveness program, Ms. Finlaw did so immediately.

Be the first to comment

Leave a Reply

Your email address will not be published.


*