1. Prepared for WCET’s 24th Annual Meeting (November 1-
3, 2012)
STUDENT FRAUD: A PROBLEM YOU CAN’T
IGNORE!
2. STUDENT FRAUD
A PROBLEM YOU CAN’T IGNORE
Moderator
Mollie McGill, Deputy Director for Programs and
Membership, WICHE Cooperative for Educational
Technologies – WCET
Presenters
Kishia Brock, Vice President of Student Affairs and
Advancement, Rio Salado College
Audra Barrett, Associate Vice President of
Instruction, Dallas County Community
College District – Dallas TeleCollege Online
Ryan Chase, Associate Dean of Student
Affairs, Rio Salado College
3. STUDENT FRAUD:
A PROBLEM YOU CAN’T IGNORE
Understanding and Addressing the Problem
Institutional Perspectives
DallasTeleCollege Online
Rio Salado College
4. COMMON FRAUD SCHEMES
Pell Runners
The Chronicle for Higher Education, April 28, 2012
USA Today, April 30, 2012
Community College Spotlight, May 12, 2012
Fraud Rings
US Department of Education, IG Report, September
26, 2011
US Department of Education, Dear Colleague
Letter, October 20, 2011
EDUCAUSE, September 19, 2012
6. HALTON FRAUD RING CASE
Ring leader engaged 4 individuals to help recruit people
to participate in the scheme to apply for financial aid
through distance education programs
Applicants were neither active students nor did they
intend to become active students
Participants kicked back a portion of those funds to the
ringleaders and her conspirators in amounts ranging from
$500-$1,500
Individuals received more than $538,000
7. FRAUD RING CHARACTERISTICS
Schemes typically target online and the less-expensive and/or
two-year “entry level” programs
Fraud “Ring Leader” recruits participants enticing them with an
opportunity for free money
Scheme participants typically target vulnerable populations (e.g.
younger persons and/or in economically depressed areas)
Most participants never graduated high school or completed a
GED program but falsify admissions
Ring Leader often sets student accounts up with one or a few
common addresses/phone numbers/emails
8. FRAUD RING CHARACTERISTICS
Participants provide personal info to Ring Leader, who will
register for school, apply for federal student aid, and “do all of the
homework” to maintain attendance until the funds are disbursed
Once funds are disbursed, Ring Leader and participant split the
funds, stop attending, and the student is not heard from again
Scheme ring leaders often attend school themselves as well as
helping recruits to attend fraudulently
Ring leaders will also set up student accounts with stolen
identities to avoid having to split the proceeds
9. FINANCIAL AID FRAUD TODAY
ED’s Office of Inspector, NASFAA Conference, Chicago, July 2012
Fraud ring investigations currently constitute about 17% of all open OIG cases
As of August 2011, OIG has opened 100 investigations and have been
evaluating 49 additional complaints
One referral from a large for-profit institution includes 600 different potential
fraud rings involving over 10,000 participants
Due to the sheer volume of referrals, finite resources, and other case work, we
cannot investigate all of the referrals we receive concerning distance education
fraud rings.
WE NEED YOUR HELP!!
10. INSTITUTIONAL REQUIREMENTS
US Department of Education > Standards of Administrative
Capability > Resolving Conflicting Data
C.F.R § 668.16(f) – an institution must develop and apply an
adequate system to identify and resolve discrepancies in the
information that the institution receives from different sources with
respect to a student's application for financial aid under Title
IV, HEA programs…
C.F.R § 668.16(g) – an institution has an obligation to refer to the
Office of the Inspector General of the Department of Education for
investigation any credible information indicating that an applicant
for Title IV may have engaged in fraud or other criminal conduct…
11. ADDRESSING THE PROBLEM
FORMULATING AN INSTITUTIONAL PLAN
Define and Communicate Staff Expectations
What activity constitutes suspicion?
How do we apply a fair and equitable standard?
Risk = Legal, e.g. Office of Civil Rights (OCR)Complaints
Collaborate with Institutions
Lansing Community College
Apollo Group/University of Phoenix
Implement Strategically
Student Success Driven
Student Conduct Driven
Admissions Driven
NOT Financial Aid Driven
12. RIO SALADO COLLEGE - CURRENT INITIATIVES
More proactive fraud prevention approach
College-wide effort instead of a “financial aid problem”
Student Code of Conduct
Embedded into Student Success initiatives
Realign student flow
All incoming students seeking a degree or certificate
Authenticate identity
Authenticate prior education
Referrals
Report analytics
Establish new organizational responsibilities
Judicial Affairs Office
Academic Integrity Team
13. RIO SALADO COLLEGE
PROCESS OVERVIEW
• Students seeking a degree or certificate at Rio Salado College
• Students supplementing coursework
Provide
Intent
• Authenticate identity
• Authenticate prior education
Degree or • Verify authenticity of any submission provided throughout the enrollment process
Certificate
Seeker
• Referrals Process
• Academic Integrity
When • Judicial Affairs
Suspicious
14. RIO SALADO COLLEGE -STRATEGIC PLAN
Year 1 Year 2 Identification
Prevention Prevention & Reporting
Degree/Certificate
Seeking Students Orientation Phase II Participation
Supplemental Advisement Academic Integrity
Students
Authentication
Organizational Change Mandatory Faculty and Staff
Placement Testing Reporting
Orientation Phase I
15. DCCCD – DALLAS TELECOLLEGE ONLINE
INSTITUTIONAL PROFILE
Seven independently accredited colleges (BHC, CVC, EFC, ECC, MVC,
NLC, RLC)
DTCO serves all campuses with mirror online sections, student
support/advising
Since 1965, has served more than 1.5 million people
Average enrollment Fall 85,000 credit, CE 25,000
Average DL enrollment 18% (most combo of F2F and online)
$45 per credit hour tuition for Dallas residents
29% of credit students receive financial aid
Centralized Financial Aid operations in 2011
Outsourced verification process to Global
16. STEPS TO AWARD
Application
Registration
Apply for FA
Orientation
Attend classes (online/F2F)
Instructor certification of attendance
17. DCCCD – DALLAS TELECOLLEGE ONLINE
FRAUD PREVENTION PRACTICES
FA disbursement takes place in phases
FA student responsibility videos – training
DOE procedure – a student attending two or more
institutions
DCCCD does not separate online from on ground in
terms of FA
Lock dates and flex term courses
22. DCCCD – DALLAS TELECOLLEGE ONLINE
FRAUD PREVENTION PRACTICES
DCCCD separation of duties
Admissions: authenticate identity
Enrollment: must be enrolled to receive financial aid
Financial Aid: Awards Management and Financial
Services
Colleague duplicate scan and FAFSA matching
database
DCCCD verification documents if information on ISR
changes
Global Contracted Services Audit
23. DCCCD – DALLAS TELECOLLEGE ONLINE
CASE STUDY
Instance of FA/VA Problem
Investigation requested by College management
Discrepancies in certifications made by VA coordinator
Violation of Federal regulations
VA coordinator who was also a student, was certifying his own
enrollment using an access code assigned to someone else
VA coordinator certified fictitious courses in order to maintain the
proper enrollment
VA coordinator terminated, and information provided to the VA
Regional Office in Waco, TX
24. RIO SALADO COLLEGE - INSTITUTIONAL PROFILE
Low cost tuition of $76 per credit hour in state
and $215 per credit hour out of state
Approximately 70,000 total student headcount
Approximately 14,000 financial aid recipients
Rapid enrollment growth
PeopleSoft school
25. RIO SALADO COLLEGE - PROCESS OVERVIEW
• Students seeking a degree or certificate at Rio Salado College
• Students supplementing coursework
Provide
Intent
• Authenticate identity
• Authenticate prior education
Degree or • Verify authenticity of any submission provided throughout the enrollment process
Certificate
Seeker
• Referrals Process
• Academic Integrity
When • Judicial Affairs
Suspicious
26. RIO SALADO COLLEGE - FRAUD PREVENTION
Pull Report of Newly Declared Program Seeking Students
Check for documentation of identity submitted
Check for evidence of prior education submitted
Apply AUTH Checklist as needed
AUTH Checklist
Admissions and Records Authenticate Identity Checklist Item
Admissions and Records Authenticate Prior Education Checklist Item
Financial Aid Additional Information Required
Admissions and Records evaluates submissions
Removes checklist items for authentic submissions
Refers falsified, altered or forged submissions to Judicial Affairs for violating
the college’s Student Code of Conduct
27. RIO SALADO COLLEGE - NEXT STEPS
Comprehensively study and evaluate effectiveness
Effects on enrollment
Catch rate
Instances of Return of Title IV Funds
Overall college debt
Incorporate additional reporting currently used by University of Phoenix
Duplicate demographic report
Duplicate direct deposit (DD) report
Reverse look-up report
DD-fraud-match report
Incarcerated student report
Death Master File report
Changes to Federal Verification 2013-2014
Dear Colleague Letter GEN-12-11 Issued July 17,2012
28. CONTACT INFORMATION
Kishia Brock
Vice President of Student Affairs
Rio Salado College
480-517-8567
kishia.brock@riosalado.edu
Audra Barrett
Associate Vice President of Instruction
Dallas TeleCollege Online
972-669-6406
audra.barrett@dcccd.edu
Ryan Chase
Associate Dean of Student Affairs
Rio Salado College
480-517-8314
ryan.chase@riosalado.edu