LOAN MISUSE

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LOAN MISUSE

Postby FINAID2 » Sat Sep 26, 2009 2:44 pm

How do PLUS loans track misuse? If one is possibly aware of loan misuse (ex: Subsidized and Unsubsidized loans used for school and the PLUS loan is clearly use for personal fundage, not schooling, tuition, books, room&Board, etc. for the student)
how does one report that?
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Re: LOAN MISUSE

Postby garyman13 » Sat Sep 26, 2009 4:11 pm

From personal experience, I believe there is no oversight what-so-ever in the entire college loan/grant/funding environment. Like many other social programs, people have found a way to circumvent any kind of checks and balances to their own benefit. I know of an older woman who has been going to college for 6 yrs and is no closer to a degree than when she started. Changing schools and degree program multiple times, she has found a way to use the money for he own benefit.

It appears the colleges don't care as long as they get their money for an enrolled student. If anyone really has a solution or way to make some government agencies aware of the abuse, I'd love to hear it. Unfortunately, it appears the same level of lax standards applies to hiring of government administrators as it does to all government programs.
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Re: LOAN MISUSE

Postby financialaidpodcast » Mon Sep 28, 2009 4:59 am

Federal student loans are disbursed first to the financial aid office, and once loan proceeds have been applied to any mandatory expenses, any remaining funds are disbursed to students. While no one can dictate how those loan proceeds are used, they're usually a very small portion (if any exist at all) of the original loan amount. No federal student loan is simply cut as a check to a student because of concerns about fraud and misuse.

If you suspect that funding is being misused, you can contact the school's financial aid officer. If you suspect that fraud is being committed, you are encouraged to report fraud to the Department of Education's Office of the Inspector General. The OIG takes all claims of fraud, waste, and abuse very seriously and will prosecute to the maximum extent permitted by law.

Department of Education OIG:
http://www.ed.gov/about/offices/list/oig/index.html

Best wishes,

Christopher S. Penn
Financial aid expert and managing editor, FAFSA Online
http://www.FAFSAonline.com
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Re: LOAN MISUSE

Postby tobsterman » Thu Sep 16, 2010 5:05 am

I think people who want to misue a loan will always find a way to do it. I think better control or even installing a special institution won't help in the long term. It is just difficult to prevent fraud and the authorities have to believe in the good intentions and grant a loan for a college student. Installing a well working control system would probably be way too expensive.
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Postby goldrefining » Wed Sep 26, 2012 4:25 am

Most students worry about transferring credits when they change colleges, but of near-equal importance is transferring the financial aid to pay for those credits.
College is possible for everyone, and a variety of financial aid options are available to help with the costs. As a transfer student, we know you understand the value of a college education. However, every school is generally different in their process. While one school may offer aid to every student that submits a FAFSA, others may require additional documentation. Another difference may be the amount of aid that the school can offer an individual student, or the procedure to act. :roll:
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