The Pennsylvania Higher Education Assistance Agency (PHEAA), also known as MyFedLoan or FedLoan Servicing, is facing a lawsuit over allegations it mishandled the Public Service Loan Forgiveness (PSLF) and TEACH Grant programs. According to the lawsuit, which was filed by the Massachusetts attorney general, PHEAA created several problems for individuals who qualify for PSLF or TEACH grants. The lawsuit claims PHEAA is guilty of:
- Keeping borrowers from staying enrolled in income-driven repayment programs. These programs, such as IBR, REPAYE and PAYE cap monthly payments to a percentage of disposable income. As a result, borrowers may have been overcharged.
- Preventing borrowers from making monthly payments that qualified towards loan forgiveness under the PSLF program.
- Keeping people who qualified for TEACH Grants from receiving benefits.
What Are PLSF and TEACH?
Signed into law by President George W. Bush in 2007, the PSLF program allows some borrowers with federal student loans who are working in certain public service or nonprofit jobs to receive tax-free loan forgiveness after 10 years of payments.
The TEACH Program allows teachers working at low-income schools to receive up to $4,000 a year to fund their educations.
PHEAA is responsible for servicing more than one-fourth of the $1.4 trillion in federal student loans. It is the only loan servicer that oversees the PSLF and TEACH programs.
Do I Qualify for PSLF or TEACH?
Despite the potential problems discussed in todays’ blog, you could still benefit from both programs if you qualify. The Kansas City student loan attorneys at The Sader Law Firm could help determine your eligibility for PSLF, TEACH and income-driven repayment programs.