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Encouragement of fraud, and engagement in deceptive, or otherwise questionable behavior

Scenario 1

x

Admissions representative told the undercover applicant that she has never seen a student decline to attend after speaking with financial aid. The admissions representative would not allow the applicant to speak with financial aid until she enrolls in the college.

x

If the undercover applicant was able to get a friend to enroll in the college she could get an MP3 player and a rolling backpack.

Scenario 2

x

Financial aid representative told the undercover applicant that he should have answered “zero” when asked about money he had in savings—the applicant had reported a $250,000 inheritance.

x

The financial aid representative told the undercover applicant that she would “correct” his FAFSA form by reducing the reported assets to zero. She later confirmed by e-mail and voicemail that she had made the change.

x

This change would not have made the undercover applicant eligible for grants, but it would have made him eligible for loans subsidized by the government.

College information and degree sought

Students receiving Pell Grantsa

Students receiving federal loansa

Graduation ratea

12

52%

69%

56%

Scenario 1

x

Admissions representative did not disclose the graduation rate after being directly asked. The college’s Web site also did not provide the graduation rate.

x

Admissions representative said the program would cost between $50,000 and $75,000 instead of providing a specific number.

Scenario 2

x

Admissions representative encouraged undercover applicant to change the FAFSA to falsely add dependents in order to qualify for grants.

x

This undercover applicant indicated to the financial aid representative that he had $250,000 in the bank, and was therefore capable of paying the program’s $68,000 cost. The fraud would have made the applicant eligible for $2,000 in grants per year.

PA – less than 2-year, privately owned

Certificate – Web Page Design

13

TX - 4-year, privately owned

Bachelor’s Degree – Construction Management; Visual Communications

81%

99%

54%

Page 25

GAO-10-948T

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