The amount of improper Pell Grant payments by the federal government more than quadrupled in the past year, wasting more than $2 billion taxpayer dollars, a new report reveals.
The 2016 fiscal year report by the Department of Education breaks down the department’s spending in a variety of areas, including the distribution of Pell Grants, the primary form of federal financial aid to low-income college students.
The report touted that the government had substantially expanded overall Pell awards compared to when President Barack Obama took office. But buried near the end of the report was a notable admission: The number of improper payments exploded between the 2015 and 2016 fiscal years.
In 2015, out of $29.9 billion in Pell Grant spending, there were $562 million in improper payments, or about 1.88 percent of all spending. But in 2016, despite spending nearly two billion fewer dollars on Pell Grants, the number of improper over-payments exploded to just over $2.2 billion, representing a whopping 7.85 percent of outlays. (RELATED: IRS Spent $12 Million On Email System Only To Find It Doesn’t Work)
The government’s regular student loan program also saw a surge in improper payments. In 2015, $1.3 billion in improper payments went out, representing 1.3 percent of $98.7 billion in total loans. In 2016, there were just under $3.9 billion in improper payments, triple the previous year’s and representing 3.98 percent of spending.
Combined, the improper payments amount to about $5.2 billion, or more than $16 for every person in the country.
The government’s report blames a “failure to verify financial data” as well as “process errors made by other parties” (such as universities) for the improper payments. The report doesn’t fully explain why these failures were so much more prevalent in 2016 compared to the prior year, though it does note an internal review by the department had deduced both Pell Grants and student loans to be high-risk programs for improper payments.
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