Posted on 06/02/2007 10:40:47 PM PDT by Politicalmom
Education Department Improperly Forgiving Loans Nearly $80 Million in Taxpayer Dollars Wasted
Washington, DC Senate Governmental Affairs Committee
Chairman Fred Thompson (R-TN) today called on Education Secretary Richard Riley to adopt recommendations from a Department of Education Inspector Generals (IG) Report detailing the improper discharging of almost $80 million in loans under the Federal Family Education Loan Program (FFELP).
The IG reported that student loans are being discharged or forgiven by the Education Department on the basis of total and permanent disability and death even though the borrowers are apparently neither. The Higher Education Act provides for loan discharges when the borrower either becomes totally and permanently disabled or dies.
"Access to higher education is important to all Americans," said Senator Fred Thompson, Chairman of the Committee on Governmental Affairs, upon learning of mismanagement of the Federal Family Education Loan Program. "Yet millions of dollars appropriated for education are being wasted through mismanagement by the Department of Education. With a little better management, it could prevent the bilking of the student loan program."
According to the Education Department Inspector General, FFELP loans totaling over $292 million were discharged for borrowers claiming total and permanent disability. Over $216 million were discharged for borrowers who died. This occurred from July 1, 1994 through December 31, 1996.
The DOE IG matched all of the borrowers who received these disability and death discharges with the Social Security Administrations (SSA) master earning records for 1997. The IG identified 9,798 individual borrowers, or 23 percent of the total disabled borrowers, who were earning wages after having over $73 million in loans forgiven. Further, 81 of these individuals earned more than $50,000 in 1997 after receiving a disability discharge.
The DOE IG also found that 708 borrowers who had received discharges totaling over $3.8 million because they claimed to be dead were actually earning wages after the discharge. Additionally, over the period studied by the DOE IG, over 6,800 new loans totaling almost $20 million have been awarded to borrowers who returned to school after previously having loans totaling nearly $11.5 million discharged due to total and permanent disability.
"Perhaps the most troubling fact is that the mismanagement in loan discharges has worsened in recent years," Senator Thompson said. According to the IG, "The amount of new loans awarded to borrowers with previous discharges for disability increased from about $1.9 million to $8.6 million, or 351 percent, from the 1994 to the 1997 award year."
In the report detailing improper loan discharges of almost $80 million in loans under the FFELP, the DOE IG made recommendations for improved management of the program.
They’re worried about $10 million a year loss?
For crying out loud, the damn govt sucked up $2.4 trillion in 2006. I figure at least $800 billion of that was wasted on unneccessary junk. Point me to the press release that calls for shrinking the fed govt by 1/3 and you’ll get my attention.
The pols can distract us with with ridiculous articles about losses of $10 million/year because of the innumeracy of the population. I doubt much of the population could even tell which is larger: $10 million or $800 billion.
Number one, this is from 1999. Number two, I posted it as an example of the work that Thompson did in office, focusing on cutting waste and reducing taxes.
It’s expecting a bit much of a single senator to reduce the government drastically, I would think.
People defrauding government is of no concern to you?
I get it,you don’t.What the heck is 10 or 80 million? The education system sucks up more money then you or I can dream about,but we’re not going to change it in our lifetimes !!!
“The education system sucks up more money then you or I can dream about,but were not going to change it in our lifetimes !!!”
If the problem was created in our lifetimes then it can be fixed in our lifetime. You can either make the problem a little bit better or a little bit worse. Doing nothing makes it worse.
Ya beat me to it....again!
I think the USA should spend a BILLION on attempting to eradicate Malaria...a tropical disease. Maybe $30 billion for fighting AIDS/HIV in Africa?
‘Progressively’ bring the entitlements to the free-market. The next president will have to do that or atleast start doing it.
I think the best conceiveable way would be to make marginal cuts in the programs (over a period of time) while holding mandatory holdings in 401k like accounts. If this was done to both SS and medicare, medical care could easily be funded by individuals and they could save a great deal of money....while having funds to invest or bear interest on.
They also need to free up medical system.
As said below, this problem was created in our lifetimes. This could be mostly solved immediately. Disband the Department of Education. Get the Feds out of the school business, return it to the States where it belongs. For goodness sakes, HOW did we ever educate our children before the Dept Ed came to be in the 70’s? And for those of us old enough, Since the 70’s, is it fair to say that the QUALITY of our schools, teachers, educational experience has declined somewhat? Just a thought.
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