Domestic, Ethics, For-Profit, Institutions, Markets, Opinion, Policy, Private education, Recruitment, Student Loans, University & College - Written by on Thursday, October 6, 2011 9:08 - 0 Comments

The New York Times editorial on: “Fraud and Online Learning”

by Von Livingson via Flickr under Creative Commons

The health care and defense industries often took the spotlight in False Claims Act interventions by the Department of Justice. But the for-profit education industry may take the lead in false-claims cases. The Department of Education’s Office of the Inspector General claims it has opened 100 investigations since 2005 and is reviewing 49 complaints. Fraudulent recruitment tactics by for-profit online colleges are generating large revenues from financial aid. The New York Times editorial page published an unsigned staff editorial today titled Fraud and Online Learning. It reveals some of those tactics and hints at the seriousness of this issue. It also shows the paper of record in the U.S. is watching the online learning trends, which is a good thing for transparency and innovation in the future:

Distance-learning students rarely show up on any campus, so their identities can be easily falsified. Fraud rings target community colleges and other open-enrollment schools that offer low-priced, online programs. The fraud rings enroll “straw” students who provide their names, dates of birth and Social Security numbers to obtain federal financial aid. The ring leaders then take a share of the student loan money that schools disburse to students after tuition and other allowable costs are paid.

Fraud rings have succeeded in enrolling prison inmates, even though they are not eligible for federal student aid, as well as “students” who were illiterate.

The inspector general’s office says participants in 42 different fraud rings have been convicted and more than $7.5 million in restitution and fines have been ordered in the past six years. This may be only a small portion of the problem. Some rings involve hundreds of participants, and it is unlikely that either the Office of the Inspector General or the Department of Justice has resources to track down and prosecute them all.

What’s at stake is online higher education – i.e. access to learning beyond the limitations of traditional brick and mortar classrooms. The Times acknowledges the growth and positive side of online learning, especially for non-traditional students… and points out that is the key to clamp down on abuse:

Online college courses have made higher education possible for untold numbers of working adults who cannot enroll in traditional classes and need flexibility to receive instruction at home. But online courses are also particularly vulnerable to student aid fraud, a growing problem that federal officials must move quickly to control.

To improve security, the government needs to put colleges on notice that they are responsible for disbursing aid to eligible students only. It should not allow payments for expenses a student does not actually have. Congress should change student aid to fix this problem.

via Fraud and Online Learning – The New York Times

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