(Source: MIRS.news, Published 04/11/2024) At least one private vendor hired to assist employees access federal student loan relief is asking teachers for their W-2s, pay stubs and tax returns as part of the application process, which is not needed to access the federal dollars, said a key state senator Thursday.
Sen. Darrin Camilleri (D-Trenton), chair of the Senate K-12 Appropriations Subcommittee, said companies are making a profit off Michigan taxpayers while mining educators' private information and increasing the risk of identity theft.
He urged districts to exercise caution when using private vendors to assist employees with accessing federal student loan relief. Fiducius, a financial services provider that has worked with more than 2,500 different employers, is asking for “unrequired” personal information “in what should be a free and easy process,” he said.
"Many school districts are contracting with companies to administer this debt relief program, not realizing that there could be long-term costs to employees, especially if they are steered into private debt consolidation loans that make them ineligible for federal relief," Camilleri said. "What's more, some of these private firms are collecting a trove of unnecessary personal data from applicants – including W-2s, pay stubs and tax returns – none of which is necessary to access federal student loan relief programs."
Camilleri is asking the Michigan Department of Education (MDE) to clarify that the aforementioned personal documents are unnecessary for education workers to access loan assistance.
With today being the deadline for public school districts to apply for student loan repayment program funding for their teachers, Camilleri is calling for more application periods.
The Fiscal Year 2024 School Aid Budget set aside $225 million to serve as a student loan repayment program overseen by the MDE. With the appropriation, school districts and intermediate districts could apply for funding to establish a student loan repayment program for their educators who owe federal student loans and are participating in a payment plan within a federal public service loan forgiveness program.
An eligible teacher could access up to $200 monthly if their district applied for funding, and up to $400 each month if they were educating in a school system where at least 85 percent of pupils were considered to be economically disadvantaged.
Alongside K-12 teachers, the program could apply to counselors, librarians, psychologists, and reading specialists who are working directly with students and are working at least 32 hours weekly.
In a statement calling upon the MDE to open additional application periods, Camilleri said "there's still plenty of funding remaining" in the $225 million pot.
"Our goal in providing this funding is to help school districts improve compensation for their educators so they can attract and retain high-quality staff. That's why I'm calling on the Michigan Department of Education to open additional application periods so we can help as many educators as possible, and to ensure rules, procedures and guidelines are clear to help districts and educators take advantage of this funding," Camilleri said.
According to national findings spotlighted by the California-based Learning Policy Institute non-profit, teachers were repaying their student loans with $342 per month, on average. The institute said the amount was greater than the monthly amount typical borrowers pay, which ranges from $200 to $299 monthly.
With about 1.3 million teachers repaying their student loans throughout the country, the institute published that approximately 60 percent of educators with outstanding loans reported experiencing high or very high levels of stress due to their debt.
