US EditionDepartment of Education Targets Federal Student Aid Scammers
- In 2024, a nationwide initiative will be launched to address student aid fraud, particularly targeting California, where over one-third of community college applications have been identified as fraudulent.
- This initiative follows an April 11, 2024, request by nine California Republican House members for an investigation into the state's fraudulent applications and audit findings revealing $200 million in potentially ineligible payments.
- The department recently introduced a temporary identity verification process for first-time federal aid applicants starting summer 2024, with plans for more permanent screening to prevent identity theft and fraud.
- Legal actions and regulatory reforms address problems with income share agreements, including a 2021 Consumer Financial Protection Bureau finding that Better Future Forward misled students and imposed unfair penalties.
- The crackdown aims to protect eligible students and taxpayers from fraud while reforms in states like Illinois regulate income share agreements to limit repayment burdens on low-income students.
37 Articles
37 Articles
Chicago Sun Times
Usa newsHelping hand or scam? A different approach to paying back student loans is under scrutiny.
Jose Aguilar’s lifelong dream of getting a degree almost fell by the wayside his sophomore year at the University of Illinois Chicago, when he lost access to federal student loans and grants. His father had not filed his taxes, which messed up Aguilar’s financial aid eligibility.“I've always wanted to go to college, because it's the one place where you can really express yourself and you can really learn a lot about what's going on in the world,…
Education Department targeting federal student aid scammers nationwide
The audit showed that in 2023, years after California lost $55 billion to fraudulent COVID-19 lockdown-era benefits payments, the state likely made “potentially ineligible payments” of nearly $200 million.
The U.S. Department of Education recently announced that it will implement a new identity verification process to combat student financial aid fraud. Community colleges in California, Minnesota, and Nevada have serious fraud cases. According to EdSource, a non-profit independent news organization in California, 116 community college systems in California lost more than $7.5 million in financial aid fraud last school year, most of which was feder…
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