Teachers say failing loan forgiveness program will cost them thousands

Hundreds of Kentucky elementary and high school teachers who were promised that their student loans would be forgiven if they went into critical subject areas such as special education say they're suddenly facing big monthly loan payments because the state forgiveness program is out of cash.

Many say they borrowed heavily for graduate school because they were assured that their loans would be paid off under the federally funded Best In Class program.

Now, they say they're being hit with loan payments ranging from $200 to $400 a month for individuals to more than $800 monthly for couples — amounts for which many haven't budgeted.

"The loan forgiveness played a large role in me deciding to go into this field," said Travis Gay, a special education teacher in the Anderson County Public Schools. "I paid for my entire master's degree out of the program, books and all, and so did my wife."

"We were told, 'It's something you can count on.' But then it was just gone."

Gay says that, without the forgiveness program, he and his wife jointly could face loan payments totaling between $800 and $900 a month until their $90,000 balance is repaid with interest.

According to Gay and other teachers, more than 4,000 Kentucky teachers could be affected.

Now, several hundred have formed a loose statewide coalition to plead their case. They're hoping that two bills moving through the Kentucky General Assembly will help, or that Gov. Steve Beshear's administration will allocate some of Kentucky's $3 billion federal economic stimulus package to keep the student loan forgiveness program alive.

The Best In Class program has been operated for years through The Student Loan People, a private non-profit corporation that is the loan arm of the Kentucky Higher Education Assistance Authority.

Under the federally funded program, individuals who agreed to teach in hard-to-fill areas such special education, math or science could get loans to pay for college and graduate school, and then have those loans forgiven. Thousands took advantage of it, applying annually to have up to 20 percent of their loan payments canceled for that year.

Things went well until Congress began cutting money for the program about two years ago, said Ted Franzeim, a spokesman for the Kentucky Higher Education Assistance Authority. According to Franzeim, allocations to the Kentucky program fell from $16 million in 2007 to $7 million last year.

As a result, he said, the program was able to forgive only $930 for each student loan borrower in Kentucky in 2008. This year it appears there won't be any forgiveness unless teachers get some relief.

That's a bitter pill for people such as Justin Matson, who gave up a job as a union electrician and took a pay cut to become a special education teacher. "This is what I really wanted to do," he said. As of now, though, Matson will have to pay off $34,000 in loans, plus interest, that he thought would be forgiven.

Matson, who teaches in the Jefferson County Public Schools, is one of the leaders in the statewide coalition of teachers that has been lobbying the legislature and Beshear's office for relief.

He said the coalition is hoping for passage of either House Bill 502 or House Bill 480, sponsored by Rep. Kevin Bratcher and Rep. Brent Yonts respectively. Both essentially call for shifting dollars from the Kentucky Teacher Scholarship Program to forgive outstanding loans made under Best In Class.

"The bills simply reallocate money from one teacher scholarship program to another and it's a small amount of money," Matson said. "So we're kind of hoping that some additional funding might come from the stimulus package."

Kevin Ray, along with his wife, Amanda, teaches special education in the Anderson County schools. He says teachers are frustrated about more than just the money. Many contend they made an agreement with the government and the government has now reneged, he said.

"They encouraged you to take out the maximum student loans," he said. "Now, we're required to pay back loans that were supposed to be forgiven. We didn't go into this field to get rich, but this is pretty tough."