The U.S. Department of Education was criticized by members of Congress on Thursday over student aid payments that were deemed improper. The payments which were made under the federal student aid scheme amounted to more than $6 billion.
The Department of Education’s inspector general, Kathleen Tighe, told members of Congress in a House hearing on Thursday that $2.21 billion was improperly paid out by the department in 2016 under the Pell grants program. Another $3.86 billion was paid out in direct loans. The total amount in financial aid that was awarded by the department in 2016 amounted to $125 billion. Close to 12 million students benefited.
Typically improper payments are defined as those disbursements which were not deserving, those that ended up in the hands of the wrong recipient, those which the amount was incorrect or those which lacked the proper documentation. Not all payments that are considered improper lead to a liability on the part of the federal government.
The chief financial officer of the Federal Student Aid Office at the Department of Education, Jay Hurt, told a subcommitttee of the House that the department would try to rectify the problem. Hurt, however, pointed out that it was not possible to completely eliminate improper payments since fraud was prevalent in most organizations. Citing a recent study, Hurt said that a typical organization normally loses approximately 5% of its revenue to fraud.
Representative Virginia Fox, a Republican from North Carolina, did not however agree with him.
“I think we should strive for zero mistakes. You are not dealing with your own money, you are dealing with someone else’s money and I want people in the department to remember that,” Fox said.
Another official at the federal financial aid program who had been scheduled to testify before the House subcommittee, James Runcie, abruptly resigned on Tuesday. Runcie, who was an Obama-administration appointee cited political disagreements with the Secretary of Education, Betsy Devos, as the reason for his resignation. The Department of Education, however, said he reigned to avoid testifying.
Representative Mark Meadows, a Republican of North Carolina and who is also the House chairman of the government operations subcommittee pressed for accountability on the part of Runcie especially over the poor results. Meadows also suggested that Runcie did not deserve the $430,000 in bonuses that he had received from the department since 2010. The North Carolina Republican revealed that he is considering subpoenaing Runcie.