For the past few years, anecdotal stories seemed to indicate that financial aid fraud was becoming a bigger problem. A new name was created for some of these fraudsters: Pell runners, which Kelly Field described as “a scam artist who bounces from college to college, staying just long enough to receive a Pell Grant.” And then there were the numerous stories about fraud rings.
Well, a new report to Congress from the U.S. Department of Education’s Office of Inspector General confirms the notion that financial aid fraud is a big problem that is getting worse.
The OIG “determined that the population of recipients considered as potentially participating in this [financial aid] fraud activity had increased 82 percent from award year 2009 (18,719 students) to award year 2012 (34,007 students). We identified more than 85,000 recipients who may have participated in this type of student aid fraud ring activity and who received over $874 million in Federal student aid from award year 2009 through award year 2012.”
The best way to combat this growing problem is for the department of education to create a student unit record (SUR)—basically assigning each student a unique identifying number. This would allow the department to know before sending checks out that the same student received Pell grants at eight different colleges, rather than (occasionally) figuring that out after they’ve already sent the money.