Student Financial Aid

Most Supplemental Educational Opportunity Grants Are Awarded to Needy Students Gao ID: HRD-92-47 January 31, 1992

Postsecondary institutions are required to award Supplemental Educational Opportunity Grants first to undergraduate students with exceptional need who are Pell Grant recipients and then, if funds remain, to other students with exceptional financial need. GAO found that most grant dollars are going to intended recipients. Some institutions, however, have awarded a small portion of their grant funds in a way that is inconsistent with federal requirements. Also, the law requires grant funds to be first distributed on the basis of previous years' expenditures, not in proportion to total Pell Grant awards or aggregate students' financial needs at an institution. Any grant funds remaining in the Supplemental Educational Opportunity Grants appropriation may then be distributed among the institutions according to relative student financial need. Thus, the grant amount received by a student may depend largely on which institution the student attends.

GAO found that: (1) most SEOG dollars went to intended recipients, but some institutions awarded a small portion of SEOG funds inconsistently with federal requirements; (2) the law requires that SEOG funds be distributed to institutions based on previous years' expenditures; (3) since the remaining SEOG funds are distributed among institutions on the basis of relative financial need, the amount of SEOG a student may receive depends largely on which institution the student attends; and (4) the major reasons that institutions awarded SEOG to non-Pell Grant recipients included helping students cover out-of-state tuition, students whose families suffered catastrophic income loss after Education selected Pell Grant awardees, and students who were ineligible for a Pell Grant because of administrative errors.

Recommendations

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