So How Do These Entitlements Work?

So How Do These Entitlements Work? was Originally Posted on February 16, 2013 by lavarock

Wikipedia says an “entitlement” is a guarantee of access to benefits based on established rights or by legislation. So I guess a Pell Grant is an entitlement since it is a benefit to people going to college and legislated. The Pell Grant is named after U.S. Senator Claiborne Pell, a Democrat from Rhode Island, and was originally known as the Basic Educational Opportunity Grant. It is used to pay for expenses.

The Pell Grant is covered by legislation titled the Higher Education Act of 1965 (HEA), Title IV, Part A, Subpart 1; 20 U.S.C. 1070a. These federal funded grants are not like loans and do not have to be repaid. Students may use their grants at any one of approximately 5,400 participating postsecondary institutions. These federally funded grants help about 5.4 million full-time and part-time college and vocational school students nationally.

The problem according to a recent news item:

Pell Grants, which max out at $5,500 per year, are available to low- and mid-income residents and can be used for tuition and other costs, including rent, groceries and transportation. If a student receives a Pell Grant and disappears with the money, the college or university is on the hook to repay both the tuition costs and the rest of the money given to the student.

According to the USA Today item, “No one knows exactly how much these Pell scammers are costing taxpayers because central record-keeping is spotty at best and often out of date. But a leading expert estimates 3.6 percent of all Pell Grant recipients across the nation are collecting the money fraudulently. That means an estimated $1.2 billion of taxpayer money was lost last school year alone, when the federal government gave out $33.5 billion in Pell Grants.”

So people sign up for a semester worth of $700 courses and pocket the leftovers of the #2750 balance and skip. They are not required to pay the money back.

This seems like yet another waste of money if the government hands out money and doesn’t require it to be used as it is supposed to be.