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 by a watchdog agency.
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.
Education Secretary Betsy DeVos said her agency would conduct a comprehensive review of the repayment plans and would 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.
The review also found 40,900 approved plans in which borrowers said they had family sizes of nine or more, which investigators said were “atypical” and amounted to statistical outliers. About 1,200 of those cases involved borrowers who said they had families of 16 or more. The department also does not require borrowers to provide documentation proving their self-reported family sizes.
Investigators acknowledged that their review doesn’t necessarily prove fraud, but they emphasized that borrowers “may have a financial incentive to commit fraud to reduce their monthly payment amount.”
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