College students are lying to lower student loan repayments?
Tens of thousands of federal student loan borrowers may be getting their monthly payments lowered by lying about their income and family size, yet the U.S. Education Department is doing little to catch them, according to a report released Thursday by a federal watchdog agency.
Among the most extreme cases reported by the Government Accountability Office are two separate borrowers who claimed to have 93 relatives in their households, along with 3,300 cases in which borrowers said they had no income even though federal data suggest they made $100,000 a year or more. All were approved for lower loan payments.
Investigators were reviewing the Education Department’s oversight of its popular income-driven repayment plans, which allow borrowers to pay lower monthly rates based on their incomes and family sizes. After 25 years of payments, all remaining debt is wiped clean.
Education Secretary Betsy DeVos said her agency will conduct comprehensive review of the repayment plans and will refer cases of fraud to the Justice Department for prosecution. She placed blame on previous administrations, saying the problems are proof that “many of the policy ideas previously pursued were poorly implemented.”
“Misrepresenting income or family size is wrong, and we must have a system in place to ensure that dishonest people do not get away with it,” DeVos said. “We didn’t create that problem, but rest assured we will fix it.”
The federal watchdog agency says it identified 95,100 cases in which borrowers were approved as having no income even though it appears they were earning money. Using wage data from the Department of Health and Human Services, investigators found that borrowers in a third of those cases may actually have been making $45,000 a year or more, including some who topped $100,000.
https://www.yahoo.com/news/feds-potential-fraud-student-loan-222805427.html