This report presents recommendations from the Office of Inspector General for amendments to the 1998 Reauthorization of the Higher Education Act that are intended to improve integrity of student financial assistance programs and to save taxpayer dollars. Seventeen proposals divided into four areas--institutional eligibility and enforcement; student eligibility; loan programs; and law enforcement are presented. Each proposal delineates the Inspector General's position, the current law, recommended changes, and the rationale for the proposed change. Proposals include: legislating performance standards for vocational schools, eliminating Pell eligibility for high-default schools and eliminating Pell advance funding; restricting distance learning to academic degree programs; requiring schools to post surety when appealing loss of eligibility due to high default rates; legislating separate statutory requirements for vocational trade schools; eliminating the 25-year-old requirement for Pell Advance Funding requiring verification of applicant income data with the Internal Revenue Service; limiting exercise of professional judgment by financial aid administrators; requiring annual reconciliation of student loan data; changing the definition of loans in repayment; standardizing accounting and reporting for guaranty agency funds; requiring certification of vocational trade school refund liabilities; requiring discharge of loans to student victims of fraud; prohibiting consolidation of defaulted loans; requiring determination of ability-to-repay in Parent Loans for Undergraduate Student program and joint parent/student liability; change record retention period; and extend statute of limitations for financial institution fraud. (CH)