Students aspiring to join various colleges in the United States to pursue higher education know how expensive college tuition can be.
For those without savings and personal funds that can cover tuition, applying for grants and loans with Free Application for Federal Student Aid (FAFSA) is a suitable option.
Approximately 43 million Americans have federal student loans. The current debt from federal student loans stands around $1.5 trillion, and millions are struggling to pay off the debt.
As a result, the government and institutions are cracking down on fraudulent applications that increase the debt and take funds away from students who need them.
The Consequences of Filing a Fraudulent Student Loan or Grant Application
Twenty U.S. Code Section 1097 lays out the criminal offences and consequences of knowingly making false claims to the federal government. If you make a false statement, forge a document, or fail to pay refunds, you face imprisonment for not more than 5 years, a fine not exceeding $20,000, or both.
However, if the amount you stole does not exceed $200, you face a fine not more than $5,000, imprisonment not exceeding a year, or both.
These are heavy penalties that no student with hopes for a fruitful college education should hope to face.
What’s more, the law also implicates those involved in the fraud process
Any person who wilfully conceals your fraud by falsifying information or suppressing material evidence faces a fine not more than $10,000, imprisonment for not more than a year, or both.
Types of Fraud in Student Loans and Grant Applications
In recent years, whistle-blowers are calling out fraud in student loans.
Usually, the prosecutors may have reason to believe that you have submitted a fraudulent claim through FASFA, or you have engaged in inappropriate behavior to obtain student loans or grants from the federal government.
Fraud can take several forms, including:
- Under-reporting your income and assets in the application. The IRS uses an IRS data retrieval tool to pull tax and income information and compare it to the FASFA application to tackle this problem. Some colleges also ask for an IRS tax return transcript, but still, verify records because guardians can falsify tax records.
- Some students use fake marriages to qualify as independent students instead of dependents.
- Using false claims of residency to qualify for lower tuition fees. Usually, most states charge in-state-students lower prices, hence the fake residency claims.
- Falsifying identity or using another person’s identity to apply for funds. In this case, the identity thieves may use social security numbers and birth dates from individuals that are incarcerated, elders in nursing homes, or young children.
- Falsifying tests and grades.
- Overstating the people in your household or family members currently in college. Usually, if there are more people in college, parent support is stretched, which increases your probability of qualifying for a student loan. Some parents may claim to be taking Master’s degrees and PhDs.
- Using fake guardianship to qualify for loans. Some students assume an independent student status to avoid providing guardian information. The parents also knowingly participate to avoid paying tuition fees.
Sometimes, you may also be a fraud victim. For example, another person may steal your identity to obtain a student loan, or you may co-sign to a student loan without your knowledge.
You should also be wary of companies that claim to run student loan debt relief programs.
Contact a Criminal Lawyer If You’re Facing Federal Fraud Charges
If you or your loved one face fraud charges, you need an experienced criminal lawyer to help you. Fraud charges are severe, and you risk prison time and hefty fines.
An attorney can help you navigate complex law, advise you about your charges, rights, and options, and prepare defenses for the court.
How To Choose a Lawyer for a Fraud Case
If you’re hiring a lawyer for student loans, ensure you hire a qualified attorney:
- First, ensure you can verify their qualifications by checking their state bar profile. Every practicing lawyer is listed with a state bar association. Search them on the website using their state bar number of names. If they are listed, you’ll find their practicing status, ethical problems, and contact information.
- Look for their online presence of a website. If the attorney works with a law firm, verify its existence by looking for a website, contact information, and an office you can reach physically.
- Check their practice areas. In this case, an attorney specializing in criminal law and has experience in dealing with fraud in student loans is best suited to defend you.
- Look for online reviews from previous clients. If they have a website with review options at the end of their published content, read them. You can also look for reviews on social media platforms such as Twitter, LinkedIn, Yelp, and Google My Business.
Filing fraudulent claims for a student loan can be a serious offence – whether you knowingly committed fraud or if fraud was committed in your name.
Whatever the situation, it’s important to hire an experienced and expert criminal defence lawyer to help you navigate the complicated process.