100 students owe $1 million in student loans

By: Tonya Mead, PhD, MBA, M.Ed, CHFI, CFE

On average, recent graduates and their parents carry about $140K in student loans. Please see the Wall Street Journal (referenced by ZeroHedge).

While federal student financial aid “help students to realize their dreams,” Fraud Magazine reports cases investigated by the U.S. Department of Education, Office of the Inspector General where criminal rings entice students to enroll in real or imagined courses under false pretenses for the sole purpose of defrauding the government.

See here trends (graphs) in student financial aid defaults

But what about Implicit Collusion among Staff and the Government?

Of late, there has been increased emphasis on the risk of student driven fraud in education. However, has anyone turned the lens toward educators and staff? What about the silence of our government?  Just recently, a whistleblower implicated employees of Howard University in fraudulently obtaining up to $1 million in financial aid during a 10 year period.

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The phenomenon of staff driven fraud in education is nothing new. Back in 1989, the Los Angeles Times published an article inquisitively asking about the association between tuition, student financial aid packages, and the practices of Ivy League schools.  At the time, LA Times wrote ” The Justice Department is investigating financial practices at up to 20 prestigious colleges and universities, apparently to determine if they have violated antitrust laws in setting tuition and financial aid packages.

Institutions ranging from Harvard University to Colby College in Maine have received “civil investigative demands” in the past few weeks from the Justice Department’s antitrust division requesting documents on tuition and fees, student aid, budget and other financial matters, school officials said Tuesday. Justice Department officials confirmed the inquiry but would not elaborate on the nature of the investigation or name the institutions involved.”

It is a wonder what ever became of the inquiry and what changes were made to assuage federal investigators to clear the universities of possible wrong-doing.

Back to the Point

Getting back to the WSJ article. High levels of student debt are generally incurred by graduate students. In fact, Josh Mitchell, the WSJ journalist, hypothesizes ”  for graduate-school students especially, there is little incentive for universities to help put the brakes on big borrowing. The government essentially allows grad students to borrow any amount to cover tuition and living costs, with few guardrails on how the final sum will be repaid.” He states further, “more than a third of borrowers from one of the government’s main graduate school lending programs have enrolled in some form of federal loan-forgiveness plan.”

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So, I guess after almost 30 years of government inquiries, we’ve answered our own question.  Nothing.

Tonya J. Mead, PhD, MBA, M.Ed,CFE, CHFI, PI, formerly a certified K-12 Administrator and School Psychologist is author of Fraud in Education: Beyond the Wrong Answer and president of Shared Knowledge, LLC https://ishareknowledge.com  If you like her work, please support her at Patreon.