United States General Accounting Office GAO Report to Congressional Committees August 1997 HIGHER EDUCATION Verification Helps Prevent Student Aid Payments to Ineligible Noncitizens GAO/HEHS-97-153 United States GAO General Accounting Office Washington, D.C. 20548 Health, Education, and Human Services Division B-277450 August 6, 1997 The Honorable James M. Jeffords Chairman The Honorable Edward M. Kennedy Ranking Minority Member Committee on Labor and Human Resources United States Senate The Honorable William F. Goodling Chairman The Honorable William L. Clay Ranking Minority Member Committee on Education and the Workforce House of Representatives The Honorable Spencer Abraham Chairman The Honorable Edward M. Kennedy Ranking Minority Member Subcommittee on Immigration Committee on the Judiciary United States Senate The Honorable Lamar Smith Chairman The Honorable Melvin L. Watt Ranking Minority Member Subcommittee on Immigration and Claims Committee on the Judiciary House of Representatives The Department of Education administers a federal student financial aid structure that in academic year 1997-98 will provide about $47 billion in grants, loans, and other aid to 8.1 million recipients. Grants are provided mainly through the Federal Pell Grant Program, under which a student may receive up to $2,700 a year, depending on the demonstrated financial need. Loans come from a number of programs, the largest of which are the Federal Family Education Loan Program (the government guarantees loans provided by private sector lenders) and the William D. Ford Federal Direct Loan Program (the government makes loans directly to borrowers). Page 1 GAO/HEHS-97-153 Student Aid to Ineligible Noncitizens B-277450 Student eligibility criteria spelled out in title IV of the Higher Education Act of 1965, as amended, require that only U.S. citizens and eligible noncitizens receive federal student financial aid. Students who do not fall into either of these two categories are considered ineligible noncitizens and do not qualify for federal student financial aid. “Ineligible noncitizens” is a broad category that includes illegal aliens (persons who are in the United States in violation of U.S. immigration laws) as well as individuals legally in the United States. They include entrants whose applications for permanent residence are still pending, tourists, foreign students or exchange visitors with temporary visas, and individuals with visas pertaining to international organizations. The fiscal year 1997 Department of Defense Appropriations Act contains several immigration and welfare reform provisions, including a reaffirmation of the citizenship-related eligibility criteria contained in the Higher Education Act. A companion provision of the law requires us to report to the appropriate committees of the Congress on the extent to which illegal aliens are receiving postsecondary federal student financial assistance. This report responds to that mandate. In discussing the mandate with committee staff, we agreed to expand our analysis to all “ineligible noncitizens” because information is not readily available on specifically illegal aliens, a subcategory of this larger group. In addition, we agreed to focus our work on describing Department of Education processes intended to prevent applicants who are ineligible noncitizens from receiving aid rather than on conducting an independent audit of those who already received aid in order to determine their eligibility. We therefore focused our work on the following questions: • What processes ensure that ineligible noncitizens do not receive federal student financial aid under title IV? • How many potentially ineligible noncitizen applicants were identified through these processes? • What are the indications, if any, of the degree to which ineligible noncitizens are receiving student financial aid despite these processes? To answer these questions, we obtained information from the Department of Education, which administers federal student aid programs; other federal agencies involved in checking students’ eligibility for aid; and four college financial aid administrators. Our methodology is explained in detail in the appendix. Page 2 GAO/HEHS-97-153 Student Aid to Ineligible Noncitizens B-277450 The processes for preventing ineligible noncitizens from obtaining federal Results in Brief student financial aid focus on identifying applicants whose eligibility is questionable and referring their names to financial aid administrators at postsecondary institutions (hereafter referred to as colleges) for follow-up. The Department of Education uses two main screening techniques to determine which applicants may be ineligible. It checks all financial aid applicants for U.S. citizenship, using records of the Social Security Administration (SSA). In addition, for applicants who are not U.S. citizens, the Department checks the records of the Immigration and Naturalization Service (INS) to determine if these applicants meet eligibility criteria. Names of applicants who fail either of these screenings are sent to financial aid administrators at colleges in which the applicant is interested in enrolling. No federal student aid can be released until the applicant provides proof of eligibility to the administrator. The Department’s processes for verifying the citizenship status of all financial aid applicants appear to be working reasonably well, as departmental monitoring has found few implementation problems. The INS and SSA screening techniques identified over 500,000 potentially ineligible noncitizens in award year 1996-97 (July 1, 1996, through June 30, 1997), but it is possible that many of them ultimately provided proof of their eligibility. According to the Department, of the 9.6 million financial aid applicants in award year 1996-97, almost 460,000 (about 5 percent) initially failed SSA screening—SSA could not confirm that an applicant was a U.S. citizen—and another approximately 108,000 (1 percent) were flagged for follow-up because INS could not confirm that they were eligible noncitizens. The Department does not know how many of the flagged applicants were subsequently found ineligible, because financial aid administrators are required to neither inform the Department of the results of their follow-up nor centrally maintain such information themselves. To shed some light on the final outcome concerning an applicant’s eligibility, we contacted financial aid administrators at four colleges with high numbers of noncitizens in attendance. They estimated that virtually all the applicants flagged through SSA and INS screening were ultimately able to demonstrate their eligibility for student aid. No one knows whether or how many ineligible noncitizens are nonetheless managing to qualify for student financial aid. The Department’s Office of Inspector General (OIG) has not opened and resolved any investigations of applicants who falsified their citizenship status and received aid since the SSA verification process was implemented in 1996. However, OIG did, primarily in response to allegations of Page 3 GAO/HEHS-97-153 Student Aid to Ineligible Noncitizens B-277450 citizenship fraud, identify 26 cases in which ineligible noncitizens received aid between 1993 and 1995, totaling about $332,000. Illegal aliens constituted almost half of these recipients. The Department referred the cases to the Department of Justice for prosecution. From the Department’s perspective, all applicants for financial aid fall into Background one of three categories of citizenship status: U.S. citizen, eligible noncitizen, or ineligible noncitizen, as shown in figure 1. By law, only the first two categories of applicants are eligible for title IV student financial aid. The third category, which includes illegal aliens and others, is ineligible for aid.1 An applicant who is ineligible for federal student aid may still be eligible for state or college aid. Figure 1: Categories of Applicants by Citizenship Status An applicant uses the Free Application for Federal Student Aid form to indicate whether he or she is a citizen, eligible noncitizen, or ineligible noncitizen. The application form also notifies applicants that information provided on the application is subject to computer matching programs with other federal agencies to verify eligibility and to prevent fraud, waste, 1 An illegal alien is a person who may have entered the United States illegally (that is, without INS inspection, undocumented, or by using fraudulent documentation) or legally (under a nonimmigrant visa or other temporary conditions but subsequently violated the terms of the visa or other terms of entry). Page 4 GAO/HEHS-97-153 Student Aid to Ineligible Noncitizens B-277450 and abuse. If information on the application indicates that the applicant is a citizen or eligible noncitizen, the Department verifies that the applicant is eligible for aid. If the information indicates that the applicant is an ineligible noncitizen, the Department does not continue processing the application and the applicant is rendered ineligible for federal student financial aid, although he or she may be eligible for state or college aid. OIG reported in 1994 that, while the Department verified the eligibility of applicants claiming to be eligible noncitizens, it did not verify eligibility for the vast majority of applicants who claimed U.S. citizenship.2 As a result of weak internal controls over the citizenship verification process, OIG concluded that the Department awarded 45,000 potentially ineligible noncitizens nearly $116 million in federal grants and loans in award year 1992-93. Although OIG did not verify that the financial aid recipients were ineligible noncitizens, it recommended that the Department initiate a data matching agreement with SSA to verify citizenship status for all federal student aid applicants who claim U.S. citizenship. OIG also recommended that the Department identify all applicants who fail the citizenship verification process and notify them that their application has been suspended until they can provide proof of U.S. citizenship to the Department. The Department implemented both recommendations in award year 1996-97. During a given school year, all federal student financial aid applications Responsibility for (about 10 million annually) go through the Department’s automated Identifying Ineligible Central Processing System. The system’s functions include matching Applicants Is Shared applicants against SSA and INS databases to make a preliminary determination of an applicant’s eligibility as a U.S. citizen or eligible by the Department noncitizen and producing the Student Aid Report (SAR). SARs are sent to the and Colleges applicant as well as all colleges he or she listed on the application. College financial aid administrators use SARs to determine the type and amount of federal financial aid the student is eligible to receive, as well as aid from state, college, and other sources. The Department also monitors, through its program reviews and independent audits, the procedures that college financial aid administrators used to determine whether applicants were citizens or eligible noncitizens. 2 Department of Education, Office of Inspector General, Ineligible, Non-U.S. Citizens Received $70 Million in Federal Pell Grants, ACN: 11-40000 (Washington, D.C.: Sept. 9, 1994). Page 5 GAO/HEHS-97-153 Student Aid to Ineligible Noncitizens B-277450 The Department Uses Two To verify that an applicant is either a U.S. citizen or eligible noncitizen, the Types of Matches to Department conducts an electronic match in conjunction with SSA and INS, Identify Potentially in which citizenship information on a student’s application is matched against SSA and INS databases. Applicants who pass the appropriate Ineligible Applicants matches are eligible for aid. Those who do not pass are flagged and must provide satisfactory proof of their citizenship status to the college financial aid administrator before eligibility can be determined. All aid applicants who claim they are U.S. citizens or eligible noncitizens undergo the SSA match to confirm their status. Applicants claiming eligible noncitizenship must simultaneously undergo the INS match for confirmation of their status, as shown in figure 2.3 The SSA match, implemented in 1996 in response to OIG’s recommendations, and the INS match, implemented in 1989, are conducted each time a student applies for aid. SSA and INS are responsible for providing match results to the Department within 24 hours of its request for verification of an applicant’s citizenship status. 3 Department officials stated that it is more efficient for the Central Processing System to submit all applications for the SSA match, whether an applicant claims to be a citizen or eligible noncitizen. Since applicants claiming to be eligible noncitizens are subject to both the SSA and INS matches, results of the INS match take precedence over those of the SSA match. Page 6 GAO/HEHS-97-153 Student Aid to Ineligible Noncitizens B-277450 Figure 2: Overview of the SSA and INS Matches SSA Confirmation of During the SSA match, the Department sends the student’s financial aid Citizenship application to SSA, which then compares the applicant’s Social Security number, name, and date of birth with its data base. All three fields must match SSA’s records before U.S. citizenship can be confirmed. If SSA confirms that the applicant’s information matches that of a U.S. citizen, the applicant is eligible to receive federal student financial aid. If SSA cannot determine whether the applicant is a U.S. citizen—that is, if there is a discrepancy in the applicant’s Social Security number, name, or date of birth—the applicant must provide the college with proof of citizenship, such as a birth certificate, passport, or naturalization certificate. The financial aid administrator uses this additional information to decide what action to take based on the applicant’s citizenship status. If the additional information indicates that the applicant • is a U.S. citizen (for example, the applicant was born abroad to U.S. citizen parents and could be a U.S. citizen), no further match is performed and the applicant qualifies for federal student financial aid; • is an eligible noncitizen, he or she undergoes the INS match, remaining ineligible for federal financial aid until INS confirms eligibility; or Page 7 GAO/HEHS-97-153 Student Aid to Ineligible Noncitizens B-277450 • is an ineligible noncitizen, he or she does qualify for federal student financial aid. INS Confirmation of Eligible The INS match has two components: primary and secondary confirmation. Noncitizenship During primary confirmation, the Department sends the noncitizen student’s application to INS, which then compares the applicant’s alien registration number with its data base to confirm that the applicant is an eligible noncitizen as claimed.4 Applicants failing primary confirmation must provide the college’s financial aid administrator proof of their eligibility, such as an alien registration receipt card (commonly known as a “green card”) or passport and must generally undergo secondary confirmation. A college initiates the secondary confirmation process by sending an applicant’s documentary evidence (obtained during primary confirmation), along with a completed Document Verification Request (INS Form G-845S) to the local INS District Office to certify the authenticity of the documents. The college must wait up to 15 business days for INS secondary confirmation before determining the applicant’s eligibility.5 If secondary confirmation indicates that the applicant’s documents have expired, appear to be counterfeit, or otherwise fail to support the applicant’s citizenship eligibility, colleges notify the applicant that unless he or she corrects the discrepancy with INS, the case will be submitted to the Department’s OIG for investigation. Secondary confirmation is not required if the college has no conflicting information on the applicant and if the applicant provides the same documents that were used to pass secondary confirmation in a prior award year, as long as the documents are current. College Financial Aid If the Department questions an applicant’s eligibility as a result of an SSA or Administrators Required to INS match, the Department identifies this information on an SAR to call it to Resolve Eligibility of the college financial aid administrator’s attention for follow-up. Once financial aid administrators make the final eligibility determination, they Flagged Applicants are required to note it in the applicant’s file and keep copies of evidence 4 INS assigns an alien registration number to each noncitizen alien legally residing in the United States and those illegal alien who it identified. 5 If the college does not receive a determination from INS within 15 business days, the financial aid administrator may review the file to determine whether the applicant is still eligible based on his or her documentary evidence. As long as the college has no conflicting information on the applicant, the applicant may be eligible for federal student financial aid. The administrator must note in the applicant’s file that INS did not respond in 15 days. Page 8 GAO/HEHS-97-153 Student Aid to Ineligible Noncitizens B-277450 they used in making their determination where these can be reviewed by program reviewers and auditors. The administrators are not required to report this information to the Department or to maintain it centrally at the college. The Department does not hold the college liable for an error in an eligibility determination if, in making that determination, the college had no conflicting data on that applicant and relied on • the SAR indicating the applicant met the eligibility requirements for federal student aid, • INS’ determination that the applicant was an eligible noncitizen, or • documents from the applicant proving that he or she is an eligible noncitizen if INS did not provide a determination within 15 business days. If the financial aid administrator determines an applicant’s eligibility without relying on one of these types of documents, the college could be held responsible for repaying federal financial aid funds to the Department; otherwise, the applicant is held responsible. For example, applicants who fraudulently filled out the application would be held responsible. Department Monitoring The Department monitors both the financial aid administrators’ Finds Few Implementation determinations of applicants’ eligibility and the two automated match Problems processes. The Department has found few problems in its monitoring of financial aid administrators’ determinations to help ensure that they were made in accordance with established Department procedures. This monitoring includes an evaluation of the college’s procedures for determining student eligibility. For example, the reviewer or auditor checks a sample of student financial aid files to determine whether financial aid administrators initiated and documented subsequent verification of student applicants who were flagged by the INS match. In reviewing a sample of student financial aid files since 1989, when matching was first implemented, independent auditors and program reviewers found that financial aid administrators made erroneous student eligibility decisions at about 3 percent of colleges audited or reviewed. The Department held these colleges liable for any federal financial aid inappropriately awarded to the students. Page 9 GAO/HEHS-97-153 Student Aid to Ineligible Noncitizens B-277450 The Department’s annual evaluations of computer programs used to perform the automated SSA and INS matches indicate that they are working as intended. In evaluating the matches, the Department recognized that their value is dependent on, and possibly limited by, the accuracy of SSA and INS data bases. To illustrate, according to the computer matching agreement between the Department and SSA, information in the SSA data base may be less than 50 percent current. The Department’s evaluations attempt to ensure that the matches are properly identifying potentially ineligible applicants. The Department’s Central Processing System performs routine edits on all applications to identify incomplete, invalid, or inconsistent citizenship-related information. The edits check to determine, for example, if citizenship is indicated, if a numerically valid alien registration number has been provided, or if the reported Social Security number is found in SSA’s data base. The Department evaluates citizenship-related edits for a sample of applications by examining how frequently they occur and how frequently applicants correct the information. The SSA and INS matches flag potentially ineligible noncitizens, but the Match Processes Department does not—and is not required to—know how many of these Identify Applicants as applicants were subsequently found by financial aid administrators to be Potentially Ineligible ineligible for aid. However, financial aid administrators we interviewed estimated that, based on their experience in resolving flagged cases, Noncitizens almost no flagged applicants were found to be ineligible noncitizens. Department statistics show that as of March 15, 1997, about 460,000 of the 9.6 million financial aid applications (nearly 5 percent) received in award year 1996-97 were flagged by the SSA match. SSA was generally unable to confirm that these applicants were either U.S. citizens or eligible noncitizens because of a discrepancy in an applicant’s reported Social Security number, name, or date of birth. The most common discrepancy was in the applicant’s name, occurring in about 83 percent of cases, followed by date of birth (12 percent) and Social Security number (5 percent). Further, the Department does not know how many of these applicants claimed to be eligible noncitizens and therefore also underwent an INS match. Approximately 108,000 of the 9.6 million applicants (about 1 percent) were flagged by INS’ match because they failed primary confirmation. Page 10 GAO/HEHS-97-153 Student Aid to Ineligible Noncitizens B-277450 The SSA and INS matches are the first step in identifying potentially ineligible noncitizens by flagging their applications. The match results do not show whether college financial aid administrators subsequently qualified these applicants for student aid. To provide some indication of what administrators were finding at colleges, we contacted four financial aid officials at colleges that we previously identified with large numbers of eligible noncitizen Pell grant recipients in academic year 1992-93.6 Collectively, financial aid administrators at these colleges estimated that virtually all applicants identified by SSA or INS matches are able to prove their eligibility and qualify for aid. They also confirmed that the most common reason for an SSA flag was a discrepancy in the applicant’s name. Estimates provided by financial aid administrators were based on their observations and experience in processing aid applications. None of the financial aid offices we contacted maintains this information centrally. Our literature search did not identify any studies or audits that examined No Comprehensive whether federal student financial aid was provided to ineligible Studies Done on noncitizens. While OIG’s only audit of student financial aid to ineligible Financial Aid to noncitizens was in award year 1992-93, it also investigates cases brought to its attention by colleges and others suspecting citizenship fraud. Ineligible Noncitizens and No OIG Findings As a result of these investigations, all OIG cases resolved to date involve ineligible noncitizens who received financial aid before the SSA citizenship of Aid Disbursed verification process was implemented in 1996. Responding mainly to Since 1996 allegations by colleges since award year 1992-93, OIG investigated and resolved 26 cases in which ineligible noncitizens were inappropriately awarded approximately $322,000 in federal student financial aid. Illegal aliens constituted almost half of these 26 recipients and received about $118,000 in aid. For the 6 other cases, it was unclear whether the person was an illegal alien because information was not available to indicate the person’s citizenship status. In all 26 cases, the student applied for and received financial aid before 1996, when the SSA match became operational. Most of the cases occurred in California, the state with the largest population of eligible noncitizen Pell grant recipients, and all cases were referred to the Department of Justice for prosecution. 6 Colleges with the highest numbers of eligible noncitizen Pell grant recipients are identified in Higher Education: Selected Information on Student Financial Aid Received by Legal Immigrants (GAO/HEHS-96-7, Nov. 24, 1995). Page 11 GAO/HEHS-97-153 Student Aid to Ineligible Noncitizens B-277450 The Department of Education has implemented two automated matches of Conclusions student aid applicant citizenship information with SSA and INS to help ensure that ineligible noncitizens do not receive federal student financial aid. The Department’s policy prohibits awarding financial aid unless the applicant furnishes proof of eligibility to the college financial aid administrator. By verifying the citizenship status of all federal student financial aid applicants, the SSA and INS match processes appear to be a reasonable way of helping prevent student financial aid being awarded to ineligible noncitizens. In addition, the notice to student aid applicants that the citizenship status provided on the application is subject to computer matching may deter applicants from seeking to fraudulently receive financial aid. The Department of Education reviewed a draft of this report and had no Agency Comments formal comments, although it provided several technical suggestions that we incorporated as appropriate. We are sending copies of this report to the Secretary of Education, Commissioner of INS, Commissioner of SSA, and others who are interested. Please call me at (202)512-7014 if you or your staff have any questions about this report. Major contributors included Joseph J. Eglin, Jr., Assistant Director; Joan A. Denomme; Charles M. Novak; Meeta Sharma; and Stanley G. Stenersen. Carlotta C. Joyner Director, Education and Employment Issues Page 12 GAO/HEHS-97-153 Student Aid to Ineligible Noncitizens Page 13 GAO/HEHS-97-153 Student Aid to Ineligible Noncitizens Appendix Scope and Methodology To determine the Department of Education’s policies and processes for verifying that only citizens and eligible noncitizens receive federal student financial aid, we contacted officials at and reviewed pertinent documents from the Department’s Office of Postsecondary Education, SSA, and INS. We requested information on the number of ineligible noncitizens from the Department. However, the Department’s information allowed us to report only the number of applicants who initially failed SSA and INS matches but not the number of applicants who were subsequently disqualified for aid by college financial aid administrators. We therefore contacted financial aid administrators at colleges with the largest number of eligible noncitizen Pell grant recipients for each of the five principal types of colleges (as we reported in 1995): public 2-year, public 4-year, private 2-year, private 4-year, and proprietary.7 We previously identified these colleges in our 1995 report on student aid provided to legal immigrants.8 Four of the five college financial aid administrators responded and provided estimates of the number of ineligible noncitizens based on anecdotal information. They said that they do not routinely collect such statistics. We did not independently verify statistics computed by the Department using information in INS and SSA data bases or verify information provided by college financial aid officials. We examined summary reports of Department program reviews and audits since 1989 that indicated that 343 colleges had been cited for improperly determining that a student was a citizen or eligible noncitizen. The summary reports did not contain details on the number of applications or students or the amount of financial aid involved. Although a large number of colleges were cited for deficiencies, we did not examine individual program reviews or audit reports because most were out-of-date in relation to the rather recent introduction of the SSA match. To determine whether any studies had been done on student financial aid provided to illegal aliens, we conducted a literature search, contacted immigration research organizations, and spoke with officials at higher education boards in the seven states with the most eligible noncitizen Pell 7 Higher Education: Selected Information on Student Financial Aid Received by Legal Immigrants (GAO/HEHS-96-7, Nov. 24, 1995). 8 In 1995, we reported that legal immigrants constituted about 4 million, or 10 percent, of students who received Pell grants totaling $662 million, or about 11 percent, of the total $6.2 billion in Pell grant aid in school year 1992-93. Page 14 GAO/HEHS-97-153 Student Aid to Ineligible Noncitizens Appendix Scope and Methodology grant recipients. We also contacted OIG offices at the Department of Education, SSA, and the Department of Justice. Only the Department of Education’s OIG maintained this information. We queried the Department’s OIG data base, the Investigative Case Tracking System, and identified 26 cases involving citizenship fraud that had been opened after award year 1992-93 and closed as of April 30, 1997, and in which financial aid was actually disbursed to the students. We reviewed each case file to obtain additional details, including the source of the case, the nature of the citizenship fraud, whether the individual involved was an illegal alien, the amount of student financial aid and date it was disbursed, and the states in which the cases occurred. We performed our work between January and May 1997 in accordance with generally accepted government auditing standards. (104877) Page 15 GAO/HEHS-97-153 Student Aid to Ineligible Noncitizens Ordering Information The first copy of each GAO report and testimony is free. Additional copies are $2 each. 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Higher Education: Verification Helps Prevent Student Aid Payments to Ineligible Noncitizens
Published by the Government Accountability Office on 1997-08-06.
Below is a raw (and likely hideous) rendition of the original report. (PDF)