College Scholarship Fraud Prevention Act of 2000
PL 106-420 (S.1455), enacted 11/01/2000

PUBLIC LAW 106-420—NOV. 1, 2000 
114 STAT. 1867 
Public Law 106-420 
106th Congress 
An Act 
To enhance protections against fraud in the offering of financial assistance for 
college education, and for other purposes. 
Be it enacted by the Senate and House of Representatives of 
the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited 
Prevention Act of 2000". 
as the "College Scholarship Fraud 
SEC. 2. FINDINGS. 
Congress makes the following findings: 
(1) A substantial amount of fraud occurs in the offering 
of college education financial assistance services to consumers. 
(2) Such fraud includes the following: 
(A) Misrepresentations regarding the provision of 
sources from which consumers may obtain financial assist-
ance (including scholarships, grants, loans, tuition, awards, 
and other assistance) for purposes of financing a college 
education. 
(B) Misrepresentations regarding the provision of port-
folios of such assistEince tailored to the needs of specific 
consumers. 
(C) Misrepresentations regarding the pre-selection of 
students as eligible to receive such assistance. 
(D) Misrepresentations that such assistance will be 
provided to consumers who purchase specified services fi-om 
specified entities. 
(E) Misrepresentations regarding the business relation-
ships between particular entities and entities that award 
or may award such assistance. 
(F) Misrepresentations regarding refunds of processing 
fees if consumers are not provided specified amounts of 
such assistance, and other misrepresentations regarding 
refunds. 
(3) In 1996, the Federal Trade Commission launched 
"Project Scholarscam", a joint law enforcement and consumer 
education campaign directed at fi-audulent purveyors of so-
called "scholarship services". 
(4) Despite the efforts of the Federal Trade Commission, 
colleges and iiniversities, and nongovernmental organizations, 
the continued lack of awareness about scholarship fi-aud per-
mits a significant amount of fi-audulent activity to occur. 
Nov. 1, 2000 
[S. 1455] 
College 
Scholarship 
Fraud Prevention 
Act of 2000. 
20 u s e 1001 
note. 
20 u s e 1092d 
note. 
79-194 0-(X)-25:QL3Part3 
114 STAT. 1868 
PUBLIC LAW 106-420—NOV. 1, 2000 
28 u s e 994 note. 
20 u s e 1092d. 
Deadline. 
Internet. 
SEC. 3. SENTENCING 
ENHANCEMENT 
FOR 
HIGHER 
EDUCATION 
FINANCIAL ASSISTANCE FRAUD. 
Pursuant to its authority under section 994(p) of title 28, United 
States Code, the United States Sentencing Commission shall amend 
the Federal sentencing guidelines in order to provide for enhanced 
penalties for any offense involving fraud or misrepresentation in 
connection with the obtaining or providing of, or the furnishing 
of information to a consumer on, any scholarship, grant, loan, 
tuition, discount, award, or other financial assistance for purposes 
of financing an education at an institution of higher education, 
such that those penalties are comparable to the base offense level 
for misrepresentation that the defendant was acting on behalf of 
a charitable, educational, religious, or political organization, or a 
government agency. 
SEC. 4. EXCLUSION OF DEBTS RELATING TO COLLEGE FINANCIAL 
ASSISTANCE SERVICES FRAUD FROM PERMISSIBLE EXEMP-
TIONS OF PROPERTY FROM ESTATES IN BANKRUPTCY. 
Section 522(c) of title 11, United States Code, is amended— 
(1) by striking "or" at the end of paragraph (2); 
(2) by striking the period at the end of paragraph (3) 
and inserting "; or"; and 
(3) by adding at the end the following: 
"(4) a debt in connection with fraud in the obtaining or 
providing of any scholarship, grant, loan, tuition, discount, 
award, or other financial assistance for purposes of financing 
an education at an institution of higher education (as that 
term is defined in section 101 of the Higher Education Act 
ofl965(20U.S.C. 1001)).". 
SEC. 5. SCHOLARSHIP FRAUD ASSESSMENT AND AWARENESS ACTIVI-
TIES. 
(a) ANNUAL REPORT ON SCHOLARSHIP FRAUD.— 
(1) REQUIREMENT.—The Attorney General and the Sec-
retary of Education, in conjunction with the Federal Trade 
Commission, shall jointly submit to Congress each year a report 
on fraud in the offering of financial assistance for purposes 
of financing an education at an institution of higher education. 
Each report shall contain an assessment of the nature and 
quantity of incidents of such fraud during the one-year period 
ending on the date of such report. 
(2) INITIAL REPORT.—The first report under paragraph (1) 
shall be submitted not later than 18 months after the date 
of the enactment of this Act. 
(b) NATIONAL AWARENESS ACTIVITIES.—The Secretary of Edu-
cation shall, in conjunction with the Federal Trade Commission, 
maintain a scholarship fraud awareness site on the Internet web 
site of the Department of Education. The scholarship fraud aware-
ness site may include the following: 
(1) Appropriate materials from the Project Scholarscam 
awareness campaign of the Commission, including examples 
of common fraudulent schemes. 
(2) A list of companies and individuals who have been 
convicted of scholarship fraud in Federal or State court. 
(3) An Internet-based message board to provide a forum 
for public complaints and experiences with scholarship fraud. 
PUBLIC LAW 106-420—NOV. 1, 2000 
114 STAT. 1869 
(4) An electronic comment form for individuals who have 
experienced scholarship fraud or have questions about scholar-
ship fraud, with appropriate mechanisms for the transfer of 
comments received through such forms to the Department and 
the Commission. 
(5) Internet links to other sources of information on scholar-
ship fraud, including Internet web sites of appropriate non-
governmental organizations, colleges and universities, and 
government agencies. 
(6) An Internet link to the Better Business Bureau in 
order to assist individuals in assessing the business practices 
of other persons and entities. 
(7) Information on means of communicating with the Fed-
eral Student Aid Information Center, including telephone and 
Internet contact information. 
Approved November 1, 2000. 
LEGISLATIVE HISTORY—S. 1455: 
CONGRESSIONAL RECORD: 
Vol. 145 (1999): Nov. 4, considered and passed Senate. 
Vol. 146 (2000): Sept. 25, considered and passed House.