Student fraud


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Student fraud

  1. 1. Prepared for WCET’s 24th Annual Meeting (November 1-3, 2012)STUDENT FRAUD: A PROBLEM YOU CAN’TIGNORE!
  2. 2. STUDENT FRAUDA 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. 3. STUDENT FRAUD:A PROBLEM YOU CAN’T IGNORE Understanding and Addressing the Problem Institutional Perspectives  DallasTeleCollege Online  Rio Salado College
  4. 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. 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. 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. 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. 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. 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 students 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. 11. ADDRESSING THE PROBLEMFORMULATING 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. 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. 13. RIO SALADO COLLEGEPROCESS OVERVIEW • Students seeking a degree or certificate at Rio Salado College • Students supplementing coursework Provide Intent • Authenticate identity • Authenticate prior educationDegree or • Verify authenticity of any submission provided throughout the enrollment processCertificate Seeker • Referrals Process • Academic Integrity When • Judicial AffairsSuspicious
  14. 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. 15. DCCCD – DALLAS TELECOLLEGE ONLINEINSTITUTIONAL 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. 16. STEPS TO AWARD Application Registration Apply for FA Orientation Attend classes (online/F2F) Instructor certification of attendance
  17. 17. DCCCD – DALLAS TELECOLLEGE ONLINEFRAUD 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. 22. DCCCD – DALLAS TELECOLLEGE ONLINEFRAUD 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. 23. DCCCD – DALLAS TELECOLLEGE ONLINECASE 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. 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. 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 educationDegree or • Verify authenticity of any submission provided throughout the enrollment processCertificate Seeker • Referrals Process • Academic Integrity When • Judicial AffairsSuspicious
  26. 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. 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. 28. CONTACT INFORMATION Kishia Brock  Vice President of Student Affairs  Rio Salado College  480-517-8567  Audra Barrett  Associate Vice President of Instruction  Dallas TeleCollege Online  972-669-6406  Ryan Chase  Associate Dean of Student Affairs  Rio Salado College  480-517-8314 