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The Real Deal: 'Pell-Runners' Running Away With Federal Cash

Updated: Thursday, April 10 2014, 01:54 PM EDT

TROY - With tuition costs skyrocketing, everyone is looking for help when it comes to paying for college but there are scammers out there, stealing federal money intended for hard-working students.  Colleges are trying to crack down on what they call "Pell-Runners" but plenty of fraudsters are still slipping through the cracks. 

Paying for college can be a life-long commitment.  "I'm probably going to be paying for it for a long time to come," says Rasheed Oberton who is a student at Hudson Valley Community College.  Oberton qualifies for a Federal Pell grant which is really the only way he can afford to go to school.  Normally, the Federal Government sends up to $5,500 a year to colleges on behalf of each student who qualifies for the low-income grant. The school takes a cut of the money to cover tuition and the rest is forwarded to the student to cover the costs of books, housing, transportation or other college-related expenses.  

"Pell-Runners" apply for the money, receive it and take-off.  Often, then don't show up for a single class or they just assume the identity of an unknowing student and intercept the check.  In 2009, the U.S. Department of Education found that these scammers pocketed more than 600 million dollars fraudulently; in 2011, that number jumped to 1 billion dollars. 

Community Colleges and Online programs are popular targets for "Pell-Runners" because they have lower tuition rates and lower academic requirements. Locally, colleges tell CBS6, these scammers haven't been a problem primarily because there are safeguards in place to protect against them.  Lisa Van Wie-Countois is the Director of Financial Aid at HVCC and says they don't pass out the cash until they are sure the students are in fact on-campus and participating.  "Hudson Valley disperses (the money) twice within the semester.  Earlier in the semester and then after the 60% point...if a student has all F's at midterms, we won't release their funds until we make sure that they're actually participating in their college course-work." says Van Wei-Countois. 

Other local schools say they have similar policies, requiring students attend orientation programs in-person before they can pick-up their checks or staggering the release of the money.  "We want to make sure that the money is getting in the hands of students who need it," says Van Wei-Countois.

Oberton is annoyed at those who try to scam the system, "kids that come from hard neighborhoods like I do, really try to work hard in the classroom so that you won't have to disappoint your family, so the people who scam the system, they really just messing it up for everybody else," he says. 


The Real Deal: 'Pell-Runners' Running Away With Federal Cash

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Hello and thank you for stopping by The Real Deal web-page! I'm hoping you'll find some useful information here. I (Jennifer Lewke) will be updating this page daily to bring you the latest news on anything and everything that may impact your wallet. Whether it's a bad business trying to rip you off, a contractor who took your money and ran, the government wasting your tax dollars, or a telemarketer who just won't stop calling, my goal is to uncover it and hopefully prevent it from happening again!

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