Student Loan and Educational Fraud

One important goal of our government is to make opportunities available for students to further their education through attending colleges, universities, and technical schools. Because the cost for higher education and technical schools can be prohibitively expensive for many, the federal government (through the Federal Student Financial Aid program) provides a variety of educational loans and assistance to students so that they can attend such educational institutions. This assistance includes loans to, and loan guarantees for, students and their parents.

Student Loan and Educational Fraud

One important goal of our government is to make opportunities available for students to further their education through attending colleges, universities, and technical schools. Because the cost for higher education and technical schools can be prohibitively expensive for many, the federal government (through the Federal Student Financial Aid program) provides a variety of educational loans and assistance to students so that they can attend such educational institutions. This assistance includes loans to, and loan guarantees for, students and their parents.

The Government’s Interest in Ensuring Student Financial Aid Assistance is Well Spent

The government’s objective in student financial aid matters is to ensure that financial aid is provided to qualifying students so that they can attend educational institutions which provide legitimate services that further the careers of students.  As a result, the government has a strong interest in ensuring that student financial aid is well-spent, and that ultimately financial aid is paid to educational institutions that benefit students.

Most higher educational institutions and trade schools rely heavily on federal loans and grant programs made available to their students.  Without such programs, such institutions and schools would not have the income available to keep their doors open.

As a condition to providing loans and grants to students of these institutions, such institutions must meet stringent criteria.  They must provide annual or other periodic reports documenting compliance with such criteria, including information about student scores, job placement, etc.  They must also report student income accurately, if they assist with loan applications.

Educational Institutions and Trade Schools May Have a Financial Incentive to Lie or Engage in Fraudulent Behavior in Order to Secure Funding from the Government

Today, there are thousands of educational institutions and trade schools in the United States, many of which are for-profit.  While most of the institutions are reputable, abuse can occur when these institutions provide fraudulent information to the government; often, in order to cover-up poor performance or the misuse of funds.

Additionally, some of these institutions may deliberately engage in fraud by making material misrepresentations to potential students about matters such as the employment rates for their graduates or graduate salaries.  Students, then, may spend months or years in these programs and pay thousands of dollars, only to not be able to get a job in their area of study.

When this happens, the students face a double-dilemma – they have loan payments that are due, but they don’t have the type of job that they expected (or the income to pay the loans). Loan defaults then commonly occur.  In addition to the students being defrauded, the federal government and other lenders and loan guarantors are also defrauded and suffer damages as the result of loan non-payment.  We are all defrauded when the government guarantees a loan that it should not and the student cannot pay.

Student & Educational Fraud Must Be Stopped.  If You Are Aware of Such Fraud, You May Benefit By Bringing a Claim Under the False Claims Act

If you’re aware of educational or student loan-related fraud, I would invite you to call me for a free consult and to learn how you may benefit from bringing a fraud case under the False Claims Act.  You will not owe me any fee while your case is progressing, as I and my firm will only be owed a fee if compensation for the federal government is ultimately recovered.