Proprietary School Compliance With Requirements of the Pell Grant Program

GAO discussed its report on proprietary schools' compliance with program requirements under the Department of Education's Pell Grant program. During the school year beginning in 1980, about 300,000 students at proprietary schools received about $278 million in Pell Grants. Under the program, each participating institution is responsible for administering the program within Education's regulations. GAO noted substantial noncompliance with program requirements and found that many proprietary schools: (1) admitted students who did not meet admission requirements; (2) failed to consistently enforce academic progress standards; (3) misrepresented themselves when recruiting students; or (4) failed to carry out their financial responsibilities under the program. In addition, GAO noted that: (1) inadequate staff resources have hampered Education's program monitoring efforts; (2) state licensing agencies and accrediting associations offer little help in enforcing program compliance; and (3) while required independent audits of participating institutions offer the potential to improve program monitoring, such audits do not always address compliance issues or fully disclose audit findings. GAO believes that Education should: (1) develop criteria to better indicate whether students are reasonably likely to complete their training; and (2) assess and improve the quality and reliability of independent audits.