[nine_k]

EBT cards exist for reasons like that. Issue a card with which you can pay for food, books, specific kinds of equipment, very much like many corporations give employees cards that are locked to particular classes of merchants. Limit the amount that can be spent on tangible goods; say, 80% should go to tuition. None can be transferred to cash accounts.

Maybe this would still allow some fraud, but much, much less profitable.

[Spooky23]

EBT was about reducing stigma and resale of food stamps and WIC. Even that was pretty limited — the amount of money skimmed for ATM fees from cash benefits exceeds fraud losses historically.

Same here. Creating some expensive and complex system that fights “fraud” that consists of people taking on lifetime debt is dumb. Make the services share the pain for bad underwriting and the problem goes away instantly.

[imtringued]

Exactly, fraud is the cost of carelessness. I.e. you're paying the fraudsters to leave you alone.