Oregon daily emerald. (Eugene, Or.) 1920-2012, July 13, 1995, Page 4, Image 4

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CAMPUS WKST
1809 Franklin Blvd 2511 VV 11th & Wilson
Student aid fraud still common,
congressional investigators say
NATIONAL
WASH INC.
TON (AP)
IVspiti' new rug
illations and Kdu
(ation Depart
men! promise*,
fraud is still widespread in fed
oral student aid programs, con
gressional investigators ton
ton ded Wed nesda \
n>«V < ited the case ot it mm
bankrupt Los Angeles trade
n !<<>->: that t nil's ted$58million
in federal money, in part for
“ghost Students” who allegedh
never enrolled
"We have an open bank, with
no security guard and no
tellers.” said Sen Sam Nunn,
D-G*
Much htame lies with the Kdu
i atiuu Department and the
inspector general s office. which
failed in numerous reviews over
several vear. to nut over the abus
es at lade A merit an St bools and
slop the flow of taxpayer money.
Nunn ttaid
' I his is a program trial s run
on the honor system." said Alan
Kdetman. an attorney for the Sen
ati Permanent Subcommittee on
Investigations. "And unfortu
nately what we have are a lot of
(Mirth ipnnts who are not honor
able "
lade is now under investigation
by the justice Department. Nunn
said.
The company's attorney con
firmed the investigation but
said the owners deny wrongdo
ing They have not been
charged.
"This school, lilt! all si bools
that re< oive these grants, oper
ated within a very complex reg
ulatory environment," said the
firm's .ittnmev. Mary (.ihbons of
r
Tappan. N Y "They ware work
ing on an ongoing basis with all
! hew people
The hoois — si x in the Los
Angeles area and on*- in Florida
di-t lured bankrupt! \ and
dieted in March three days after
the FBI raided school offices
About 4.MM mostly poor, His
panic students were taking class
es at the time
Senate investigators i ontend
lade offn ials collet ted federal
Fell Grant money for “ghost stu
dents'' who either never enrolled
in < lasses, or dropped out after
registering.
Federal prosei utors in Los
Angeles did not return phone
tails Wednesday, hut California
state officials have said they an*
investigating whether lade
failed to reimburse the federal
government when students
dropped out
The Fell (.rant money has
since disappeared, and three of
the owners have returned to their
In tines m A r$*en! mu s.t-.ii Senate
investigator Hdelman A fourth is
living in m»s Angulos.
I'm us appalled bv what wc'ri'
hearing today ns vmi are," David
l.nngiintM ker, the Kdiu.nlion
I Vpartment's assistant se< retan
for |kisls*s tindnrv education. told
lawmakers
Hut I.unganot ker arguoii his
agency has improved its oversight
of student aid programs in the
last few wars- keeping sus|«*i t
v hoots out in the firs! plac e, and
doing audits more frequently to
kirk out schools that misbehave
Nevertheless, i.onganet ker
said, protdems keep popping up
among for-profit trade schools
! or that reason, the Edu< ation
Department will soon propose
change* in the way ii deals with
Ihoiw schools, he said,
In a highly publicized crni k
dawn two years ago. Congress
rw)uinxl the Kduealion Deport
ment to kick out of the student
loan program any schools with
high numbers of students who
defaulted Most were trade
schools.
But many of those schools just
moved into the Pell Grant pro
gram, which has fewer safe
guards. Nunn said
Congress doesn't want to end
federal aid to trade school stu
denis. Nunn cautioned. Ins ause
"some of these schools provide a
good education "
But he promised a cra< kdown
on fraudulent schools
lade offered its students train
ing in automotive mechanic s.
computer software and Knglish
as a second language It had
si hoola in ■ downtown Los
Angeles. Santa Ana. HI Monte,
North Hollywood. South Cate,
and Oxnard, Calif., and Hialeah.
I la
Hm only small numbers of stu
dents found jobs in those fields
after their sc heading. said Senate
investigator K Mark Webster He
i ontended that the sc hools pro
vided inadequate books and
equipment and that teachers were
poorlv trained
tilting what acting Inspector
t.eneral John I’ Higgins |r
at know lodged were mistakes in
his agenc v's investigation of the
school, Nunn also raised alarms
about proposed cuts in the
inspee tor general's budget
"Congress is a lot better at cre
ating programs than monitoring
them." Nunn said
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