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Government looks to crack down on FAFSA scammers

Published: February 14, 2014 | Category: Latest News

The start of each new semester at colleges and universities around the United States means the federal government continually faces a barrage of financial aid scams. The rise in rip-offs may continue as the Obama administration outlined a plan to raise the amount of financial aid available to students in a August 2013 plan.

The House Education and the Workforce Committee has begun to target serious forms of fraud. Acts such as receiving a loan and never attending school, stealing student financial aid checks and falsifying GED certificates are considered high-level offenses.

There are a few typical, lower-level shams that the government has been able to catch. These include schemes that have people reporting a lower income on the Free Application for Federal Student Aid (FAFSA) form, overstating the number of children enrolled in college, falsifying income tax returns and incorrect reporting about marital status of parents or students.

Congress has begun looking into instances of financial aid fraud because of various factors. Higher education has seen an increase of the federal Pell grant maximum limit by $900, as well as tuition costs that have soared over 250 percent in the past three decades, while income grew by only 16 percent. The average student borrower now graduates with over $26,000 in debt.

FinAid.org has listed some tips on combatting fraud here.