Pell Grant Validation Imposes Some Costs and Does Not Greatly Reduce Award Errors

GAO analyzed the Department of Education's efforts to verify data submitted by applicants to the Pell Grant Program through validation and the effects of validation on educational institutions and on student applicants for financial aid.

GAO conducted: (1) in-depth case studies of 12 postsecondary schools representing the diversity of schools that Pell Grant recipients attend; and (2) a random sampling of the financial aid offices of 400 other institutions. GAO also surveyed students at three different types of schools and compared the experiences of validated and nonvalidated students. GAO found that: (1) validation increased from 39 percent of recipients in 1981 to 1982 to 64 percent in 1982 to 1983; (2) schools were generally positive toward validation and willing to see it expanded to other financial aid programs, although they reported increased costs and award delays attributable to validation; (3) validation problems and delays in awards did not appear to have an effect on most students' academic plans, although about 1 percent of them may have had their plans negatively affected; and (4) substantial, continuing problems with student application and institutional errors exist despite validation, with overawards occurring more frequently than underawards. GAO also reviewed Education's most recent studies of Pell Grant error and found that its efforts to reduce error were hindered by: (1) lack of clear purpose and formal goals, with little done to prevent, as well as detect, error; (2) information gaps caused by lack of regular monitoring of error rates at all types of schools; (3) decisions made under time constraints, contributing to misinterpretation of data; (4) fragmentation within the Office of Student Financial Assistance; and (5) isolation from other agencies that deal with award inaccuracies.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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