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Financial Planning / Paying For College

URL:  http://boards.fool.com/oh-for-petes-sake-financial-aid-is-complicated-15302132.aspx

Subject:  Re: penalized for being responsible Date:  7/3/2001  6:45 PM
Author:  RiverCityFool Number:  3994 of 8206

Oh for pete's sake.

Financial aid is complicated and frustrating, but fraud is not an appropriate -- or a smart -- response. Better to work to find ways to raise money, save money, borrow money if need be.

See http://www.finaid.org/fafsa/maximize.phtml for tips on *legally* maximizing aid eligibility.

In contrast to your blithe assumption that you won't be caught, they say: "Financial aid administrators are obligated to notify the US Department of Education when they encounter cases of fraud. (If they don't, their school is held liable when the US Department of Education audits them.) Every school verifies the FAFSAs of at least one-third of their students, and some schools verify 100% of the financial aid applications. This is in contrast with the IRS, which audits only a very small percentage of tax returns. So if you lie on your financial aid forms, there's a very good chance you'll get caught. ... If you get Federal student aid based on incorrect information, you will have to pay it back; you may also have to pay fines and fees. If you purposely give false or misleading information on your application, you may be fined $10,000, sent to prison, or both."

Here's a court document -- http://www.kentlaw.edu/7circuit/1999/apr/98-2992.html -- regarding an appeal from a sentence received after being found guilty of three counts of filing false income tax returns and one count of presenting a false statement on a college financial aid application. (the restitution related to tax liability was modified, the rest was upheld)

And see the March 19, 2001 Chronicle of Higher Education for this article: "18 Parents and Their Financial Advisers Are Charged With Federal Student-Aid Fraud" From a followup article in the March 30 issue: "Nearly all of those cases are being resolved with consent judgments in which the defendants agree to pay double the amount of the actual fraud. The judgments currently total more than $825,000, and the money is being returned to the U.S. Department of Education."


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