Summary: The Department of Education must take the lead in marshalling its own resources and enlisting the support of the states in protecting federal student financial aid programs from fraud and abuse. GAO discovered that many Orthodox Jewish schools, or yeshivas, in New York City were involved in misconduct relating to the Pell Grant Program, which is supposed to help finance the postsecondary education of low-income undergraduates. The yeshivas had been submitting documentation to the Department of Education for (1) "ghost" students--students who had never applied for Pell Grants or persons who had never enrolled in or attended the yeshivas that were using their names; (2) ineligible high school students; (3) persons whose biographical information had been sold to yeshivas by "brokers" for use in obtaining Pell Grants; and (4) misrepresentation of their academic programs and other eligibility criteria. Between 1983 and 1993, the 23 institutions GAO investigated obtained more than $300 million in Pell Grant funds; 60 percent of this money--$197 million--was obtained within the last three years. During this period, the Department of Education failed to adequately screen or review schools for participation eligibility.
