TIP to students and parents who are tempted to cheat on their applications for student aid: Congress is considering a proposal to make you easier to catch.
Federal aid is based on financial need, so students have to disclose their family income and savings. Congress is currently re-evaluating the entire federal student-aid program. Under changes requested by the Education Department and in a bill proposed by the House, all applications would be checked against your income tax returns. If you low-balled your income in order to qualify for more aid, you'd be exposed.
It's not clear how prevalent cheating is.
In 1997, the Education Department's Office of Inspector General (OIG) checked the income claimed by 2.3 million students who received Pell Grants for the 1995-1996 school year. About 102,000 of these students -- 4.4 percent -- claimed a lower income than they actually received. That's a small percentage but a significant amount of money. The government gave these students at least $109 million in unwarranted aid.
A total of 3.7 million dependent and independent students got Pells that year. If the rest of the group followed the same pattern, the taxpayers were cheated out of almost $177 million. These students might also have qualified, unfairly, for government-subsidized student loans and other grants. What's more, this estimate is low, says Dianne Van Riper, the OIG's assistant inspector general for investigations.
In the OIG study, the government was able to check only the income of the students. The income of the parents of dependent students wasn't available. The parents are the ones with the money -- but often, their income is falsified, too.
Most of the cheaters are middle-class families, but some of them earn much more. More than 300 Pell Grant recipients underreported their incomes by more than $100,000, the OIG reported. One claimed zero income, yet the tax return showed that the family made more than $1.3 million that year.
Other ploys by parents: Falsely claiming to be separated (so the other spouse's income doesn't have to show on the application); putting down fictitious children in college (which raises the amount of aid you can get); or low-balling the size of savings and investments. Some students falsely apply as orphans, which gives them an edge.
Parents and students don't always think up these games themselves. They go to shady financial-aid counselors, who promise to get them maximum aid.
In the past 12 months, the law caught up with a South Los Angeles service that netted clients at least $116,000 in unwarranted aid; a college adviser who helped football players file deceptive aid applications; a Worthington, Ohio, instructor who held seminars for parents on how to cheat; and two Detroit financial-aid consultants who scammed at least $20 million from the federal program over several years.
Many parents caught in these schemes claim that they didn't understand what was going on.
I don't believe them. Parents sign the forms and see the data. Even if they sign a blank form that the counselor filled in, the government will send them a Student Aid Report or acknowledgment, confirming the information they supplied.
The colleges rarely bring lawsuits against parents who cheat. But they often ask for restitution, although they may not be able to collect. They're also supposed to report cheaters to the
government. Unfortunately, they often don't follow through.
Even so, Van Riper says, the government is working on more fraud cases, especially those involving consultants. Some of the parents are being handled criminally; others face civil charges and fines. Students lose future aid and are pressed to return aid they've already received, plus fines.
Congress should, by all means, agree to a check on tax returns. This would deter cheating and direct money to the students who need it most.
Pub Date: 5/04/98