نبذة مختصرة : Every year, millions of high school graduates seek ways to finance the rising costs of a college education, at times falling prey to scholarship and financial aid scams. To help students and their families, on November 5, 2000, Congress passed the College Scholarship Fraud Prevention Act of 2000 (Act) to establish stricter sentencing guidelines for criminal financial aid fraud. The Department of Education (ED), working in conjunction with the Federal Trade Commission (FTC), is charged with implementing national awareness activities, including a scholarship fraud awareness site on the ED website. The Act also required that the Attorney General (DOJ), the Secretary of Education, and the FTC jointly submit to Congress each year a report on that year's incidence of fraud by businesses or individuals marketing financial aid assistance services to consumers. ED and the FTC have continued and refined their consumer education efforts. Using a variety of media, the agencies disseminate information to help consumers avoid falling prey to scholarship scams. ED materials provide information about the major federal student aid programs, remind students that there is no fee to submit the "Free Application for Federal Student Aid" and that free assistance with applying for aid is available from ED, high school counselors, and college financial aid administrators. After a small downturn in 2000 and 2001, the number of complaints to the FTC's Consumer Sentinel database increased to 4,486 in 2004, a significant increase from 67- in 2003. The percentage of total fraud complaints in the Consumer Sentinel database also increased in 2004. Although the increase could be an indication of an increase in scholarship fraud, other factors suggest that the increase more likely is due to other factors, including better reporting. possibly resulting from an increase in the number of law enforcement and consumer protection agencies referring complaints to the Consumer Sentinel database and greater awareness by consumers of this type of fraud and how to report it. Additionally, an analysis of the complaints in the Consumer Sentinel database indicates that there have been complaints about many companies but often only one or a few complaints per company. When complaints suggest a pattern that may indicate a problem, they are typically reviewed to determine if an investigation should be initiated. A review of the complaints Consumer Sentinel received continues to indicate that the nature of the fraudulent activity has shifted from scholarship search services to financial aid consulting services, a trend that was identified in previous reports. ED has found a similar trend, with the majority of complaints it receives centered around services that claim to help students simplify the process of applying for aid. In terms of law enforcement, the FTC has continued its campaign, Project Scholarscam, to prosecute and prevent scholarship fraud. This year, the FTC resolved an action initiated in 2003 and brought a contempt action against fraudulent purveyors of college financial aid services. DOJ also brought actions against individuals engaged in financial aid fraud. In addition, the FTC continues to monitor the Consumer Sentinel database for new targets and solicits information from ED regarding complaints it receives. The report concludes by noting that the FTC and DJ continue to coordinate parallel civil/criminal actions in appropriate cases. (Contains 17 endnotes.) [For the 2004 Annual Report, see ED504667.]
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