Critical Thinking Paper

Critical Thinking PaperScamming Financial Aid Christine Monyak March 1, 2013 According to recent polls, many middle- and lower-class families arent given the financial aid that they need to afford college. Because of this, many bright, young students are missing out on necessary opportunities to succeed in life. To fix this worsening problem, federal agencies, private lenders, and state agencies should reform their policies by checking backgrounds to make sure people arent lying about their income, recognize when the given amount of aid isnt enough, and disregard race as a factor in how much a person receives for Financial Aid. Although these problems are fairly recent, the act of giving extra money for help in paying for college goes way back. The first known act of Financial Aid was established in 1643, when the first scholarship was given out by Lady Anna Radcliffe Mowlson at Harvard University. However, it wasnt until 1840 that there was the first student loan program at Harvard University . Today, many scholarships and student loans are given out for almost any college to students who qualify (FinAid.com). With Financial aid came significant problems. First, some people whose wealth would be too high to qualify for financial aid lie about how much they earn on Financial Aid papers, which takes away money that poor and lower-middle-class families need to be able to send their kids to college. For example, an Illinois woman named Shavon Casson used her dead sisters and her cousins identities on her Financial Aid papers to make it look as if she had less money than she really did and was sent to prison for cheating the system this way. However, some cheaters arent caught, and because colleges have only a certain

amount of aid to give out this takes away from the people who need it most. With some colleges asking for over $50,000 in annual tuition, its no wonder so many people resort to desperate measures like these to get a chance at a college degree. Another problem with the current Financial Aid system is that the amount of aid given often doesnt fully meet the families needs. Some families, in order to get more grants, spend a lot of money before applying for aid, so that they have less in the bank when they apply. They might also misreport their income on their tax returns to show a lower amount. This also takes away aid money from people who truly need it. Lastly, race is often considered as a factor in financial aid grants, which is unfair. Minorities are often given more aid money, scholarships, and opportunities for college simply because of their race or ethnicity. All academic and other factors being equal, if two low-income students who have been admitted to college have the same financial aid needs, why should race be counted in awarding that money? There are poorer students of all races and ethnicities who should be treated equally when awarding needs-based tuition aid. The first issue addressed is people lying about their incomes or using false identities to get more grants. To solve this, the financial aid committee needs to do a background check on the family applying, so that they can figure out expenses, number of family members, and the income of that family. The problem with filling out a form manually is that the family can exaggerate expenses, or lower their income, taking away money from the people that it truly belongs to. To do this, they can contact the employers of the working members of the family to determine their average income. Then, they use the information from the filled out form, such as the number

of family members, expenses, and bills, to determine a satisfactory grant for the person or people applying for Financial Aid. An event where this has occurred is in the case of Shavon Casson, in April, 2007. Shavon took her dead sister and cousins identities and used them on her Financial Aid form to obtain larger student loans. She also used another persons identity to gain employment, thus receiving more grants. She also used this unnamed persons debit card and spent over $12,000 to enlarge the amount of student loans that she was receiving. This woman was only one example of the desperate measure in which some families will go in order to obtain money for overpriced schools. Another example of financial fraud is from Texas just a few weeks ago in February. ValleyCentral.com reports: "A federal grand jury indicted both Clarissa Yvette Villalobos and Melinda Michelle Sanchez on federal fraud charges. (ValleyCentral.com) These women were arrested for lying about their incomes on application forms. So far, so further information has been revealed, but this is yet another serious and recent case of financial fraud in order to gain more in student grants. A second problem with the current financial aid system that is preventing certain students from attaining satisfactory grants is the fact that the company only looks at what one has in the bank, and not their income. One man, who remains anonymous, says that he considered giving his mother a large sum of money to aid her just a few months before he paid for his daughter to go to college. He said that the Financial Aid would only see what he had in his bank, and since it would be lower than usual, he would receive a larger sum of money for his daughters college fund. He wasnt the only one to do this. Many other people took advantage of this system and instead of using it the way it was supposed to, cheated the system by spending large

amounts of money before applying for aid as to gain more than they deserve. This is just another reason that many poor and lower middle class families are deprived of the financial support that they need to continue to have successful and rewarding lives, which often requires a college degree, something unattainable without enough financial support. The college degree is becoming the new high school diploma: the new

minimum requirement, albeit an expensive one, for getting even the lowest-level job. (nytimes.com)
Several examples include one anonymous father in Philadelphia, USA, who asked a staff member is he could donate money to his brother before he applied, so that he received more from his financial aid. The man told him that that was illegal, and if he was caught cheating on the application form, he would have to return all of the money, and not receive any financial aid at all. Although in this case, the crime was prevented, it continues to take place all over the country, as families with enough money to pay for college still apply for financial aid in hopes of not having to spend as much as otherwise. However, this takes away from those who truly need it most, such as the poor, who dont need to cheat to receive the aid they need, but arent getting it because of these unfair reasons. To put a stop to this, the financial aid committees need to check into peoples financial records, and see what theyve spent. If there are large sums being donated mysteriously and out of sync with the other payments, then the family should be investigated or the aid looked into. Those arent the only ways that money is given to students unfairly. Race is a large factor in determining how much money is being donated to a family. For unknown reasons, many minorities are granted scholarships and financial grants over the white population with similar financial statuses. This is also taking away from

poorer white students who need financial aid to get into a top school. However, it is unconstitutional to choose simply by race. The controversy over race-based financial aid programs began in the Department of Education (DOE), the agency that oversees the enforcement of Title VI. In 1990, the DOE Assistant Secretary for Civil Rights issued a statement that race-based scholarships were unconstitutional and illegal under Title VI of the Civil Rights Act of 1964(bc.edu). Because of this, colleges and financial aid committees wont say when theyre giving out more to a minority at the risk of getting caught, and it is hard to pinpoint the criminals. According to recent research, may STEM (Science, Technology, Engineering and Math) programs want to diversify themselves, since this program is largely dominated by white males.(gofinancialaid.com). To do this, they offer large scholarships to African Americans, Latinos, Native Americans, etc. Technically, this isnt fair, since the whites who are applying and cant afford it dont get as much of a grant. On top of that, many companies dont give out grants anymore, and instead, they give out loans, leaving many students in debt. The problem is only worsening, and to give students extra money that they dont need isnt going to help at all. To solve this crime, and prevent biases based on race (to help minorities as well, since no one would be selected simply for being white) race should not me a part of the application process, and the company should be blind to the ethnicity of the student or family applying, as to be fair to everyone. Unfortunately, this problem isnt getting any better. Many middle and lower class families arent able to afford college. According to a poll from bankrate.com, When asked to self-report, fewer than half of parents (47 percent) feel they can afford to send their kids to school, but a full 78 percent are willing to make at least one major sacrifice in order to do so. For many, this means shortchanging their

retirements ( Cheryl Allebrand bankrate.com). Fifty percent of all families cant afford to go to college, which is an enormous problem, and is causing scams. Of course people are going to try to cut costs, when college is costing them over $50,000 for some schools! To fix this, there needs to be more rules on scamming: more background checks, more financial history checks to make sure people arent cheating the system to get more cash. This is depriving others of the money that they need, which is that 50%. In order to afford college, some have been caught lying on their financial aid applications about their amount of money in the bank, the number of children they have, their expenses, and even in one case, their identity. Others, since the FA only looks at ones amount of money in the bank, donate money to help out family members or organizations in order to get a larger grant or loan to help pay for school. Some get preferred scholarships because of their ethnicity, since programs want to diversify themselves, even if their grades arent outstanding from anyone elses. This also takes away scholarships and opportunities for bright, young students to be able to go to the college they deserve to go to. Lastly, the fact that middle class isnt able to afford college anymore is a problem that needs to be addressed. Is it because people are scamming the system? Why are they scamming it? People are scamming or cheating because college prices are so high. The prices are high because the colleges are losing money, and theyre losing money from cheaters. With correct background checks and solutions that help stop this problem, they can regain lost money, and help lower the prices. With help, middle class can afford college again.

Bib+liography
Kingsbury, Kathleen. "Gaming the Financial-Aid System." The Daily Beast. Newsweek/Daily Beast, 2010. Web. 1 Mar. 2013. <http://www.thedailybeast.com/articles/2010/01/04/ gaming-the-financial-aid-system.html>. This article was very helpful, as it showed me what some people do to cheat the Financial Aid system, as well as name some examples. This helped a lot, and was perfect for one of my arguments.

ED. US Department of Education, 4 Apr. 2007. Web. 5 Mar. 2013. <http://www2.ed.gov/about/offices/list/oig/invtreports/wi042007.html>. This website was a documented file of Shavon Casson's arrest for fraud of student loans and identity theft. This was needed on my report, as I was showing an example of fraud in the financial aid system.

"Feds: Financial Aid Fraud at South Texas Vo-Tech in Weslaco." NASFAA. NASFAA, 26 Feb. 2013. Web. 5 Mar. 2013. <http://www.nasfaa.org/Main/fa-news/ State/Feds__Financial_Aid_Fraud_at_South_Texas_Vo-Tech_in_Weslaco.aspx>. This source was another example of a financial aid fraud, which helped back up my arguments.

"History of Financial Aid." The Smart Student's Guide to Financial Aid. FinAid, 2010. Web. 5 Mar. 2013. <http://www.finaid.org/educators/ history.phtml>. This article helped me understand the history of financial aid, and was crucial for my paragraph on the history of my problem, which is scamming and money deprivation in the financial aid market. Rampbell, Catherine. "It Takes a B.A. to Find a Job as a File Clerk." New York Times Website. NY Times, 19 Feb. 2013. Web. 16 Apr. 2013. <http://www.nytimes.com/2013/02/20/business/ college-degree-required-by-increasing-number-of-companies.html?pagewanted=all&_r= 0>. This article showed me how hard it is to get a job without a college degree.

"Should Higher Education Race-Based Financial Aid Be Distinguished from Race Based Admissions?" BC EDU. N.p., n.d. Web. 6 Mar. 2013. <http://www.bc.edu>. I used this as proof that choosing based on race was unconstitutional. Allebrand, Cheryl. "Half of Families Can't Afford College." Bankrate.com. Bankrate, n.d. Web. 6 Mar. 2013. <http://www.bankrate.com/brm/news/ Financial_Literacy/Sept07_college_poll_results_a1.asp>. I used this text as backup to show how many people were struggling financially. GoFinancialAid. "Minority Financial Aid." GoFinancialAid.com. GoFinancialAid, 2013. Web. 6 Mar. 2013. <http://www.gofinancialaid.com/resources/types/ minority-financial-aid>. This text showed what advantages minorities get from FA.

Works Cited

O'Shaughnessy, Lynn. "Financial Aid Cheating: 6 Reasons to Stay Honest." CBS News Finance. CBS News, 12 Apr. 2011. Web. 5 Mar. 2013. <http://www.cbsnews.com/8301-505145_162-37245028/ financial-aid-cheating-6-reasons-to-stay-honest/>.

"History of Financial Aid." The Smart Student's Guide to Financial Aid. FinAid, 2010. Web. 5 Mar. 2013. <http://www.finaid.org/educators/ history.phtml>.

"Feds: Financial Aid Fraud at South Texas Vo-Tech in Weslaco." NASFAA. NASFAA, 26 Feb. 2013. Web. 5 Mar. 2013. <http://www.nasfaa.org/Main/fa-news/ State/Feds__Financial_Aid_Fraud_at_South_Texas_Vo-Tech_in_Weslaco.aspx>.

ED. US Department of Education, 4 Apr. 2007. Web. 5 Mar. 2013. <http://www2.ed.gov/about/offices/list/oig/invtreports/wi042007.html>.

Kingsbury, Kathleen. "Gaming the Financial-Aid System." The Daily Beast. Newsweek/Daily Beast, 2010. Web. 1 Mar. 2013. <http://www.thedailybeast.com/articles/2010/01/04/ gaming-the-financial-aid-system.html>.

Weston, Liz. "Should you pay for kid's college?" MSN Money. MSN, 20 Apr. 2012. Web. 6 Mar. 2013. <http://money.msn.com>.

"Should Higher Education Race-Based Financial Aid Be Distinguished from Race Based Admissions?" BC EDU. N.p., n.d. Web. 6 Mar. 2013. <http://www.bc.edu>. GoFinancialAid. "Minority Financial Aid." GoFinancialAid.com. GoFinancialAid, 2013. Web. 6 Mar. 2013. <http://www.gofinancialaid.com/resources/types/ minority-financial-aid>.

Allebrand, Cheryl. "Half of Families Can't Afford College." Bankrate.com. Bankrate, n.d. Web. 6 Mar. 2013. <http://www.bankrate.com/brm/news/ Financial_Literacy/Sept07_college_poll_results_a1.asp>.

Rampbell, Catherine. "It Takes a B.A. to Find a Job as a File Clerk." New York Times Website. NY Times, 19 Feb. 2013. Web. 16 Apr. 2013. <http://www.nytimes.com/2013/02/20/business/ college-degree-required-by-increasing-number-of-companies.html?pagewanted=all&_r= 0>.