Could Clearer Definitions Save the Government Billions?

Earlier today the House Subcommittee on Higher Education, Lifelong Learning and Competitiveness held a hearing “to examine how non-profit and for-profit colleges and universities administer and enforce student eligibility requirements for federal financial aid programs.” Witnesses included George Scott, Director of Education, Workforce, and Income Security at the GAO; Robert Shireman, Deputy Undersecretary of the Department of Education; Mary Mitchelson, Acting Inspector general of the Department of Education; and Harris Miller, President and CEO of the Career College Association.

“I am troubled by what GAO found” in its recent report (PDF) on this subject, said Ruben Hinojosa (D-TX), the subcommittee’s chair, during his opening statements. “I am particularly concerned that some for-profit institutions have engaged in a number of unscrupulous practices to increase their access to Title IV funds.” These is an understatement. In short, the system is a mess. While the exact severity of the mess isn’t entirely clear, what is clear is that more oversight, and some very simple terminological tweaks, are desperately needed.

One lowlight involved the Ability To Benefit (ATB) test, which students lacking a high school degree or the equivalent must take to receive federal financial aid funds. The GAO has found many instances in which test administrators helped students cheat to get them into for-profit schools—and to get federal funds into those schools’ coffers.

Scott played some rather damning audio from the GAO’s undercover investigation of these practices. In one instance, the test administrator, talking about a specific question, said, “I don’t like the way they ask it of you, so I’m telling you the answer is E.” Later, she said of one area in which the test takers had to get ten questions right, “I’m going to give you three; that means you’ve got to nail seven.” Clearly, not how the test is supposed to be given.

The most surprising recurring theme had to do with terminology. Online learning has complicated the higher education world, and the government hasn’t kept apace. Key words and phrases aren’t clearly defined in government guidelines, which makes it much easier for fraudsters to wrongly acquire federal dollars. For example, the government doesn’t have a clear, agreed-upon definition for “valid high school diploma,” said Mitchelson, which exacerbates the diploma mill problem. The definitions of “class,” “instruction,” and “attendance” are also lacking, she said, which makes it hard to determine whether a given student who is receiving financial aid for an online program is actually enrolled. These are instances in which it would appear that very slight tweaks could save a lot of money.

Perhaps the most depressing moment came when Mitchelson was asked, “What challenges does your office face in combating fraud and abuse in the federal student aid programs?” She responded that she could sum that up in one word: resources. Her department has around 300 people to oversee more than $782 billion worth of programs. For those keeping track of home, that means each employee in her department has to keep tabs on more than $2 billion of taxpayer money.

No wonder there are problems.

Jesse Singal

Jesse Singal is a former opinion writer for The Boston Globe and former web editor of the Washington Monthly. He is currently a master's student at Princeton's Woodrow Wilson School of Public and International Policy. Follow him on Twitter at @jessesingal.