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ERIC Number: ED504667
Record Type: Non-Journal
Publication Date: 2004-May
Pages: 19
Abstractor: ERIC
College Scholarship Fraud Prevention Act of 2000: Annual Report to Congress
US Department of Education
Every year, millions of high school graduates seek ways to finance the rising costs of a college education, at times falling prey to scholarship and financial aid scams. To help students and their families, on November 5, 2000, Congress passed the College Scholarship Fraud Prevention Act of 2000 (Act) to establish stricter sentencing guidelines for criminal financial aid fraud. The Department of Education (ED), working in conjunction with the Federal Trade Commission (FTC), is charged with implementing national awareness activities, including a scholarship fraud awareness site on the ED website. The Act also required that the Attorney General (DOJ), the Secretary of Education, and the FTC jointly submit to Congress each year a report on that year's incidence of fraud by businesses or individuals marketing financial aid assistance services to consumers. ED and the FTC have continued and refined their consumer education efforts. Using a variety of media, the agencies disseminate information to help consumers avoid falling prey to scholarship scams. ED materials provide information about the major federal student aid programs, remind students that there is no fee to submit the "Free Application for Federal Student Aid" and that free assistance with applying for aid is available from ED, high school counselors, and college financial aid administrators. After a small downturn in 2000 and 2001, the number of complaints to the FTC's Consumer Sentinel database continued to increase slightly in 2003. The percentage of total fraud complaints in the Consumer Sentinel database attributable to scholarship fraud, however, has continued to decline. This decrease in the percentage suggests that the increase in number of complaints is likely not due to more scholarship fraud activity, but rather better reporting. A review of the complaints received by Consumer Sentinel continues to indicate that the nature of the fraudulent activity continues to shift from scholarship search services toward financial aid consulting services. In terms of law enforcement, the FTC has continued its campaign to prevent and prosecute scholarship fraud. Project Scholar scam, formally initiated in 1996, combines law enforcement with consumer education to stop fraudulent purveyors of college financial aid services. This year, the FTC brought two law enforcement actions against fraudulent purveyors of college financial aid services. The FTC also revisited several Internet sites previously identified as making problematic claims regarding their scholarship services. Many of those sites either shut down or voluntarily agreed to modify the problematic language. The FTC continues to monitor the Consumer Sentinel database for new targets and will solicit information from ED regarding its activity. The report concludes by noting that the FTC and DJ continue to coordinate parallel civil/criminal actions in appropriate cases. (Contains 14 endnotes.) [For the 2003 Annual Report, see ED504630.]
US Department of Education. Available from: ED Pubs. P.O. Box 1398, Jessup, MD 20794-1398. Tel: 877-433-7827; Fax: 301-470-1244; Web site:
Publication Type: Reports - Descriptive
Education Level: Higher Education
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: Department of Justice, Washington, DC.; Department of Education (ED); Federal Trade Commission, Washington, DC.
Grant or Contract Numbers: N/A