Financial Aid Fraud Increases with Online University Participation
What’s that old saying? With the good come the bad? Take it with a grain of salt? No good deed goes unpunished? Unfortunately, they seem to be true in the light of the 42 online financial aid fraud rings that have been convicted since 2005.
With the increase of online university enrollment comes the higher possibility for online financial aid fraud. According to a new report by the Department of Education’s Office of the Inspector General, there have been 215 fraud participants since 2005, cashing in about $7.5 million in restitution and fees to the online universities they swindle. In fact, about 17% of the Office of the Inspector General’s cases involves financial aid scams.
Why is this happening now?
The reason online universities have seen an upswing in the amount of financial aid fraud is because federal aid laws were changed in 2005 to coincide with the boom of online learning. Previous to 2005 colleges could not participate in federal aid programs if more than half of their student body were enrolled in distance-learning, or online, courses.
Many of these fraudulent rings apply for financial aid for individuals who do not intend to take classes at all, or who are completely unaware of the application. One case involved an inmate of a South Carolinian prison who applied for $467,500 in aid in the names of her fellow inmates. The funds were al sent to the same address in the form of checks or debit cards, and the inmates were none the wiser that their names were helping their fellow inmate cash in on some big bucks.
Colleges are fighting back
To prevent this onslaught of financial aid fraud colleges are fighting back. Stricter identification verification techniques are being implemented, as are requirements of participation, grades, etc. to receive financial aid at online universities.
Many online universities and community colleges have also hired teams with the specific job of identifying and exposing fraudulent cases in applications for the Pell grant.
