Student Financial Aid: Data Not Fully Utilized to Identify Inappropriately Awarded Loans and Grants

GAO discussed the Department of Education's student aid programs, focusing on Education's: (1) use of student aid data to ensure compliance with regulations and prevent program abuses from reoccurring; and (2) planned improvements to its financial aid systems. GAO noted that: (1) Education has not fully used available data to enforce compliance with federal requirements, particularly regarding ineligible recipients and overpayments; (2) almost one-half of ineligible students have defaulted on previous loans; (3) Education has consolidated some oversight responsibility for its loan and Pell programs; (4) Education has initiated several improvements to its student aid programs including developing new systems, implementing data controls in existing systems, and strengthening institutional program reviews, but it is too early to determine the effectiveness of these initiatives; and (5) some of these improvements may not be sufficient to curb program abuses, since they are not sufficiently aimed at preventing loans to ineligible grantees.