February 8, 2008
$600-Million Is Lost in Lender Loophole, and U.S. Wants $15-Million Back
More than four years after an Education Department researcher warned that loan companies were using a loophole to improperly claim more than $600-million in federal subsidies intended to help students, the department has agreed to seek a repayment.
The amount: about $15-million.
The department sent a letter late last month to the Pennsylvania Higher Education Assistance Agency, a nonprofit lender known as Pheaa, saying it agreed with part of a call for repayment made by the
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