All sectors of higher education have an interest in ensuring that federal student aid programs serve their intended purpose. When the public loses confidence in federal student aid because of fraud and abuse, future funding and political support are put at risk, affecting the ability of low-income students in all sectors to finance a college education. More importantly, when a student enters postsecondary education in the hope of a better life, but leaves without a degree and with a debilitating debt, the effects on that student and family can be a lifelong loss of hope, and financial devastation.
Unfortunately, there are many situations in which efforts to combat fraud and abuse have been insufficiently focused—creating unnecessary burdens for all institutions without effectively combatting real problems. Notable examples include regulations dealing with state authorization and gainful employment. At the same time, fraudulent behavior can go unnoticed by regulators for years.
Over time, the most effective means for combatting fraud and abuse have been those that rely on specific criteria. Changing the 2-year cohort default rate to a 3-year rate to limit manipulation of the indicator is one recent example of a constructive step. Another positive move would be to apply to veterans’ education benefits the same 90/10 rule currently in effect only for the Title IV student aid programs.