The validity of information provided in applications to the Basic Educational Opportunity Grant (BEOG) program was studied, along with procedures used in recovering overpayments. The objective was to investigate misreporting and misuse of the BEOG program. A 1977-1978 study reviewed cases referred to the U.S. Office of Education by educational institutions. Attention was directed to reasons for institution referrals, the mode of case resolution, the impact of the validation process on Student Eligibility Indices, the impact on changes to individual Student Eligibility Reports (SERs) entries, and types of documentation used to support case referrals. Another study investigated a random sample of about 8,000 applicants who were selected based on 1977-1978 applications that were believed to entail errors on SERs. The criteria identified cases in which internal inconsistencies were apparent in the application. In addition, a separate set of criteria for identification of potential misreporters was developed: American College Testing Program criteria that accounted for possible sources of error that had been identified through past validation efforts and studies. The outcomes of the first year of operation of the Overpayment Recovery System were also assessed. Statistical findings of the studies are included in approximately 50 tables. (SW)