House Bill Could Return $340 Million To Pell Grant ProgramHouse Republicans introduced a bill last month to reduce fraud in the Pell Grant program, a move they say could free up as much as $340 million for the higher education program.The lawmakers say they would use the additional funds to provide the grants to more students, increase the maximum award for students — a move called for by House Democrats — or to reduce the current budget shortfall in the program for future recipients.“Pell Grant funds should be used to benefit needy students, and needy students alone,” says Rep. John Boehner, R-Ohio, chair of the House Education and Workforce Committee. “The federal government needs to do a better job of ensuring the rights of needy students are protected against abuse and fraud in the Pell Grant program.”The bill aims to improve the income verification process for Pell Grant awards by matching information provided on financial aid applications with information on file with the Internal Revenue Service. The proposal would only require disclosure of personal information on file with the IRS in cases where the discrepancy is large enough to impact the student grant or loan. Sensitive tax information could only be disclosed to U.S. Department of Education officials or to the taxpayer who filed the return, and could not be disclosed directly to schools or contractors.This year, the Education Department anticipates that more than 13 million people will apply for federal student aid. To verify income information, about 4 million of these applicants will be required to turn over detailed tax information to school administrators with few controls in place to guard against re-disclosure or misuse of this highly personal information. Also, nearly 100,000 people will be required to waive their right to taxpayer privacy as a condition of applying for an income-contingent student loan.Between $300 million and $400 million in Pell Grant aid was mistakenly awarded during the last year on record because some applicants misreported their income levels on their federal student aid applications, the Education Department’s inspector general told the House Budget Committee earlier this year.“The General Accounting Office has confirmed that this substantial misallocation of resources could be corrected if Congress would redesign the law that governs sharing of information between the Department of Education and the Internal Revenue Service,” said Rep. Sam Johnson, R-Texas, who introduced the bill. “This bill would accomplish that and better protect taxpayer privacy.” Johnson serves on the House Ways and Means Committee, which handles taxes, and the House Education and the Workforce Committee, which oversees student loans and grants.
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