The Pennsylvania Higher Education Assistance Agency or PHEAA is being held liable for the mismanagement of the Public Service Loan Forgiveness program as it is the primary servicer.
In September 2019, these concerns were raised during a subcommittee hearing involving the U.S. House of Representatives.
PHEEAA President’s absence raised eyebrows
During the subcommittee hearing, the CEO and president of PHEAA was conspicuously missing, and this mollified the concerned lawmakers.
The response he gave through a letter was that the institution was bound by federal regulations and laws.
PHEAA has been facing substantial scrutiny over the federal student loan program.
This institution is being criticized at a time when elected officials and consumer advocates at both the state and federal levels have asserted that loan services are part of the worst actors in higher education.
For instance, lawsuits against servicers have been filed by the Consumer Financial Protection Bureau (CFPB) and Attorneys general. The primary issue raised entails misconduct, and it has been detrimental because borrowers’ debt relief has been considerably affected.
PHEEAA’s high rejection rate
Congress members have been seeking answers from PHEAA based on its high rejection rate when it comes to offering the Public Service Loan Forgiveness program.
Nevertheless, a report availed on October 9 suggested that the blame on student loans’ mismanagement is mistakenly rendered to loan servicers.
It stipulated that borrowers’ frustrations were instigated by the design and approach used in federal loan programs.
It was also proclaimed that the complaint system utilized by CFPB was imperfect when it came to accessing the extent of servicing failures. As a result, amicable solutions were necessitated for productivity purposes.
Loan crisis traced to poor PHEEAA policies
Conversely, student loan crisis from unpaid tuition and other college fees have resulted in a substantial national debt; this was traced by this study to poor policies, including mismanagement of scholarship funds.
Investing in education has always been considered as a way to a brighter future. Experiences have taught us otherwise when we take into account the cost of education and its returns.
The majority of learners take student loans to ease the financial burden and ensure that they have a smooth transition from high school to colleges and universities.
