‘Pell runners’ steal $1 billion in aid

Pell runners” — scammers who scram once they’ve collected financial aid — are having a tougher time defrauding the U.S. Education Department.

Community college instructors are requiring more class work in the first few weeks to identify unserious students. And the mammoth University of Phoenix now requires a three-week orientation program. It was designed to help new students understand the rigors of college before they take out a student loan, but it’s also weeded out Pell runners.

. . . the scammers typically target schools with low tuition and minimal academic requirements. They apply for aid, sometimes using identities of multiple witting or unwitting participants.

A portion of the money goes to the college for tuition and fees; the rest is “refunded” to students. They’re expected to spend it on books, transportation and other expenses, but scammers skedaddle as soon as they pocket the aid.

Only 2.7 percent of Pell payments go to fraudsters, according to the National Association of Student Financial Aid Administrators. But the the dollar amount has soared from $600 million in 2009 to $1 billion in 2011.

•Starting this summer, Des Moines Area Community College will require all enrollees to attend an orientation in person.

•Lansing Community College has delayed disbursements of some aid for several weeks and asks faculty to report names of students who don’t come to class in the first two weeks.

•The Louisiana Community and Technical College System, concerned that its relatively low cost is attracting scammers, is raising tuition.

Increasingly, fraudsters are targeting online education programs, according to Education Department investigators.


POSTED BY Joanne Jacobs ON May 10, 2012

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