Friday, October 14, 2011

"Popularity of Online Educ. Spurs Financial Aid Fraud" Intense orientation combats "Pell Runners","Straw Students"?

Apollo has begun a required 3-week online orientation that is too much work for the 'ringleaders' of financial aid scams. I hope this orientation also helps prepare students to learn more effectively in their online courses. 

"With the huge expansion of online college courses, financial aid scams have become a serious problem..
"The rings generally seek federal aid for 'straw students' who have no intention of pursuing an education — or...are unaware of the application. The aid is sent to the college, which takes the portion covering the initial tuition and fees, and then 'refunds' the excess to the student to cover other expenses like books, transportation and room and board.
"By now, the vast majority of colleges and universities offer online courses, and some huge commercial institutions have hundreds of thousands of online students. Amid tough economic times, an increasing number of these students are actually what are known as 'Pell-runners' — people who disappear as soon as they receive the proceeds of their Pell grants or student loans.

- All of the excerpts above and those that follow are from  "As Online Courses Grow, So Does Financial Aid Fraud" - complete citation also included below.

"Community colleges have been especially vulnerable to fraud rings, because of their open enrollment and low tuition, which leaves room for substantial excess aid. At Rio Salado College, an online community college in Arizona, 64 people were convicted in a $538,000 scheme that unraveled after an employee in Rio Salado’s financial aid office noticed similar handwriting on several applications.

"The biggest fraud, along with the most significant efforts to combat it, seems to have occurred at Axia College, a two-year program of the University of Phoenix, the nation’s largest for-profit institution. Officials there have identified — and referred to the inspector general — some 750 rings involving 15,000 people.

"Last year, Apollo introduced a required three-week orientation in hopes of weeding out students likely to drop out. Axia’s new enrollment has since dropped by about half; Mr. Berg said the orientation had also cut down sharply on fraud.

"'Fraud ringleaders, operating on behalf of several students, have to maintain the appearance that they’re all participating in orientation, and that’s just too much work for the ringleader,' Mr. Berg said."

- Above excerpts from "As Online Courses Grow, So Does Financial Aid Fraud," by Tamar Lewin, New York Times, October 13, 2011
A version of this article appeared in print on October 14, 2011, on page A17 of the New York edition.

Photo of "Straw man and women: Straw people made with bales in Les Champs Geraux, Brittany, France," by Ian Haycox
 Some rights reserved by Ian Haycox

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