It’s a yearly spring ritual: college-bound students, young and old, applying online for much-needed federal student aid in the form of grants or loans.
Unfortunately, a few unscrupulous individuals view Title IV Federal Student Assistance funding as a way to line their own pockets — not to get an education. According to a recent assessment by the U.S. Department of Education’s Office of Inspector General, the number of aid recipients potentially taking part in criminal fraud rings is increasing.
Why the increase in student aid fraud? For one thing, there are more online higher education opportunities—a single criminal participant can create multiple online student identities and apply for aid in each name. Another reason is the growing popularity of open access, lower-cost schools — like community colleges — where perpetrators can get back a larger percentage of a financial aid award in the form of excess Title IV funds (once the school applies the funds to tuition, anything left over is remitted directly to the “student” to use on related educational expenses like books, supplies, transportation, living costs, etc.).
It’s not just the theft of millions of dollars of taxpayer money, though. Criminals committing federal student aid fraud are stealing enrollment slots from legitimate students and depriving qualified students of the Title IV funds they need. Those grants and loans sometimes make the difference between attending school and not attending school.
But law enforcement agencies and the higher education community are fighting back.
- A Baltimore-area school test proctor and an admissions officer pleaded guilty in a scheme to manipulate test scores of students who were taking assessment exams to qualify for federal grants.
- A former inmate at a South Carolina prison pleaded guilty to applying for federal student aid using the identities of some of her fellow inmates.
- A San Diego college paid a civil settlement and its financial aid director pleaded guilty in connection with a scheme to submit falsified financial aid applications to obtain grants for students who were not eligible to receive them.
Investigative entities plan to continue to identity and bring to justice those who commit federal student aid fraud. And the Department of Education and colleges and universities say they will continue to put protections in place that make it harder to perpetrate these crimes.
Both actions will help ensure that federal student aid for higher education ends up in the hands of those who need and deserve it the most.