The brand new TEACH grant program provides up to $4,000 dollars annually for undergraduate and graduate students who say they plan on becoming teachers in high-needs school and in filling jobs in fields where teachers are hard to find.
However, if graduates fail to meet either of these two requirements (as well as some others), the grant automatically converts to a loan owed to Uncle Sam. In fact, the feds estimate that about 80 percent of the grants will convert to loans. That also means that the feds expect that only about 20 percent of the teachers receiving money to help solve this problem will actually end up helping to alleviate the shortages the feds are trying to address, a pretty poor rate of return.
There?s also scant research showing the effectiveness of service pay-back grants such as TEACH. Other models may be more effective. In the health care profession, for instance, the U.S. Government Accounting Office found that outright loans compared with grants require less monitoring and produce more graduates who fulfill their commitments and stay in their jobs longer.