Recent events have increased concerns about the potential for fraud in Education's student loan programs related to loans for U.S. residents attending foreign schools. In 2002, GAO's Office of Special Investigations created a fictitious foreign school that Education subsequently certified as eligible to participate in the student loan program. GAO investigators subsequently successfully obtained approval for student loans totaling $55,000 on behalf of three fictitious students. Over the past decade, Education's Inspector General has investigated many instances of suspected student loan fraud involving individuals applying for loans for purported attendance at foreign schools. The conference report accompanying the 2001 Labor, Health and Human Services, and Education Appropriations Act mandated that GAO examine and report on fraud, waste, and abuse with respect to student loans for Americans attending foreign schools.
Recommendations for Executive Action
|Department of Education||1. To help ensure that foreign school officials have the knowledge necessary to properly administer FFELP, the Secretary of Education should develop on-line training resources specifically designed for foreign school officials.|
|Department of Education||2. To better ensure that Education is adequately overseeing foreign schools participating in FFELP, the Secretary of Education should undertake a risk assessment to determine how best to ensure accountability while considering costs, burden to schools and students, and the desire to maintain student access to a variety of postsecondary educational opportunities. Further, after completing the risk assessment, if Education determines that legislative and/or regulatory changes are justified, the Secretary should seek any necessary legislative authority and/or implement any necessary regulatory changes.|