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The Department of Justice and four states filed a multibillion-dollar fraud suit against the Education Management Corporation, the nation's second-largest for-profit college company, charging that it was not eligible for the $11 billion in state and federal financial aid it had received from July 2003 through June 2011.

A new government report on recruiting techniques in the for-profit higher education industry finds instances of college officials urging applicants to invent children and to hide their savings as a way to leverage more federal aid.

Colleges, universities and other academic organizations received just shy of $2 billion in grants directed to them by individual members of Congress in the 2010 fiscal year, an Inside Higher Ed analysis shows. Earmarks are commonly derided as "pork barrel spending" because they are seen as attempts by legislators to keep their constituents happy (and voting for them).

An Arizona woman pleads guilty to running an elaborate scam that highlights what federal authorities describe as the vulnerability of online education to financial-aid fraud. The scheme embroiled Rio Salado College, home to one of America's largest online programs, in a half-million-dollar con.

The Education department must explain why it let a student loan company that an audit had found improper millions of dollars. The loan company received the payments through a subsidy program that guaranteed a 9.5 percent interest rate on student loans. In an accord reached in January, the department allowed it to keep the $278 million it had received but suspended future payments of more than $800 million until a future audit could determine whether the company was eligible for the money.

According to Stossel there is a financial corruption going on in American schools. He claims that there is a myth that the education system needs more money. US spend more on schooling than the vast majority of countries that obtain better results in the international tests. But the bureaucrats still blame school failure on lack of funds, and demand more money.