Pell Grant Abusers

"The nation’s staggering national debt of $17 trillion fuels most of the steamy debates in Congress these days, and just about every government program is being scrutinized, including the $33 billion Pell Grant Program," reports

"The staggering amount of taxpayer money gifted to students in the form of Pell Grants in a single year is mostly well used. Both political parties more or less agree that the Pell Grants Program, named in honor of former Rhode Island Senator and education reformer Claiborne Pell, benefits the economy because it encourages low- to- moderate-income students to get the skills they need to join the workforce. Instead of being a drain on the economy and government aid programs, the philosophy goes, aid recipients become productive, tax-paying citizens.

Forty-one percent of college undergraduates received annual Pell Grants of $5,500 in 2011-’12, according to the National Association of Student Financial Aid Administrators. Seventy-one percent got some kind of governmental assistance, including loans and campus part-time jobs, the organization says on its website.

But like any gigantic aid program, some fraud and waste exist and the colleges that deal with the consequences most often are inexpensive community colleges.

Nationwide, colleges unintentionally breed scam artists who last year may have milked taxpayers of about $1 billion. The Detroit Free Press reported that estimated figure in a 2013 article that examined what the feds call 'Pell runners,' people who enroll in a school with low tuition with the sole intention of pocketing the balance of the per semester grant. They skip the classes and enroll in a different low-cost school the following semester to continue the scam.

In New Orleans, for example, the cost of tuition and fees at a community college, such as Nunez, can runs $1,500 to $1,600 a semester. If a student doesn’t buy books, the Pell Grant refund, after the college deducts tuition costs from the $2,750 per semester grant, could be as much as $1,250.

Nationally, Pell runners make up a small fraction of the students who benefit from grants. However, in community colleges they cause a lot of headaches and can even drain them of precious financial resources."   

NASFAA's "Financial Aid in the News" section highlights media coverage of financial aid to help members stay up to date with the latest news. Inclusion in Today's News does not imply endorsement of the material or guarantee the accuracy of information presented.