Just as a tiny minority of welfare cheaters gave ammunition to critics of the entire system, a few greedy students, parents and school officials have given a black eye to the federal student-aid program by flouting the eligibility requirements. And with only a limited amount of funds available for grants and low-cost loans, the crooks and chiselers are depriving honest applicants of help they deserve.
The Education Department has not been blind to abuses of the student-aid system. The department's inspector general pursues cheaters and embezzlers with a vengeance, getting back the misdirected funds and turning in the worst offenders for criminal prosecution.
From a recent Education Department inspector general's report and from interviews with an official in the inspector general's office, our reporter Karen Talley has assembled these outrageous examples of student aid gone awry:Two brothers managed to get low-cost federal loans in excess of legal limits by submitting applications in three states. They were eventually caught, and have repaid about $60,000 they weren't entitled to, with $80,000 to go. One enterprising college student collected more than $100,000 in federal assistance in four years. He did it by using spurious information, like aliases and fake Social Security numbers, to enroll at 11 colleges in four states and the District of Columbia. The owner of a Reno, Nev., beauty school conned the government out of thousands of dollars by collecting double tuition for some students. He urged them to apply for federal grants to cover their tuition, even though a local community college was paying the fees. The man pleaded guilty to embezzlement and had to return about $13,000 to the Education Department. A joint FBI-Education Department investigation caught three top officials of Sioux Empire College in Hawarden, Iowa, getting federal loans in the names of students who they knew weren't attending the school during the loan period. The three officials pleaded guilty to misapplication of student-aid funds after they were indicted. "Financial aid counselors" who worked for the Wilfred beauty academy chain in Massachusetts "coached and encouraged" students to overstate financial needs to get aid they didn't deserve. The seven employes pleaded guilty to charges of making false statements and aiding and abetting the commission of a crime. They had been indicted after a joint FBI-Education investigation. A Nigerian collected $17,540 in state and federal student aid by falsely claiming to be an American citizen. A woman in New York lied on a parental financial statement to make it appear that her daughter was eligible for thousands of dollars in federal assistance. The mother understated the family income and overstated the number of dependents. When confronted with the investigators' evidence, she returned the money. Several students in Kentucky colleges are facing civil suits for lying about financial status to get federal aid. They overstated needs in applications to several grant programs and collected amounts ranging from $1,500 to $12,300.