California Worries About Fate of Loan-Repayment Aid for Teachers
California Worries About Fate of Loan-Repayment Aid for Teachers
By PAUL SULLIVAN
Published: June 9, 2009
California’s budget troubles are starting to have an impact on its programs to help teachers and nurses repay their student loans.
Loan payments to teachers in the state program normally arrive in the spring. But they have not been sent out yet.
“We’ve delayed payments for the first time because of cash flow problems,†said Diana Fuentes-Michel, executive director of the California Student Aid Commission. But she added that she now expected the payments to go out “within the next two to three weeks.â€
The state program, called the Assumption Program of Loans for Education, pays up to a total of $19,000 toward student loans over four years. About 6,500 teachers are currently in the program.
Despite the latest assurances that the checks will finally be going out, Ms. Fuentes-Michel said she was concerned that the worst might not be over. She said she had asked her staff to look into the effect the state’s finance crisis could have on the teachers’ loan program and two similar ones that serve nurses.
“We’re looking into whether California can renege on its commitment,†she said.
The state’s budget woes are deep and well known. Declines in both the housing and job markets have hit the state especially hard. At the same time, its arcane budget rules have limited what California officials can do to raise additional money. There is a deep concern that the state will run out of money over the summer.
All this is little consolation for recipients of loan repayments. Since The New York Times first reported that states like Kentucky and Connecticut were having problems honoring their commitments to loan forgiveness programs, established to encourage students to focus on underserved areas in education, the Your Money team has been inundated with e-mail messages from California teachers.
“I am nervous, really nervous,†a special education teacher in San Diego wrote. “It took so much paperwork just to get accepted into the program, and so much hard work to make it through school to teach special education children.â€
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