Fraud: Financial Aid and Online courses . . . . and how

faculty can help

Presented by:Jennifer Prusko, Financial Assistance RepresentativeJanet Pagan-Klehr, Financial Assistance Coordinator

• Grants

• Loans

• Scholarships

• Work Study/Student Employment

What is Financial Aid?

General Eligibility Requirements U.S Citizen or eligible non-citizen

Valid Social Security Number

Received a H.S Diploma or GED For 2013-2014 students may be required to submit documentation of a High

School Diploma and/or GED

Be enrolled in an eligible degree/certificate program Not all certificate and degree programs have been approved for financial aid

purposes

Students must be taking classes that apply towards their degree and/or certificate

Not be in default

Maintain Satisfactory Academic Progress

Standards of Academic Progress 2.0 GPA

67% Completion Rate – cumulatively!! We look at all hours attempted since Day One at COD Attempted credit hours include all courses that appear on the student’s

transcript, including any courses a student fails, retakes, withdraws from, or has an incomplete.

Exceeding 150% of their program hours (includes transfer hours) Based on the academic program indicated on their record at College of

DuPage Attempted credit hours include all courses that appear on the student’s

transcript, including any courses a student fails, retakes, withdraws from, or has an incomplete. NOTE: Up to 30 hours of eligible remedial courses may be excluded from attempted hours.

Students with a Bachelors Degree automatically fall into this category.

Financial Aid Process @ COD File the Free Application For Federal Student Aid, FAFSA

File the application for each academic year Form is available beginning January 1st

Submit additional information to our office as determined by their results Verification Worksheet Tax Transcripts Verification of untaxed income, SNAP benefits, child support, etc Proof of Citizenship

View their award letter in their myACCESS Accept their Federal Stafford Loans

Complete a Master Promissory Note online at www.studentloans.gov Complete Entrance Loan Counseling online at www.studentloans.gov

Reject their Federal Stafford Loans

Books and Financial AidBook Vouchers are available for eligible students – if they meet the following criteria:

They have received their award letter from the Office of Student Financial Assistance, which can be viewed on their myACCESS

They are eligible for a Federal Pell Grant - OR - They have accepted their Federal Stafford Loans They have remaining Pell Grant and/or Federal Stafford Loan

funds after covering tuition costs Book vouchers are eligible for required books and supplies only!! Spring Semester 2013 Bookstore Dates

January 3, 2013 – February 11, 2013

Refund ChecksAny financial aid funds in excess of tuition and book costs are then mailed to the student or placed on their AccelaPay Debit Card middle of the semester and before grades have posted

For example:Tuition =$ 1,396.50Pell Grant =$ 2,082.00Sub Loan =$ 1,734Unsub Loan =$ 2,970--------------------------------------------------Refund Check =$ 5,389.50

And this is where the financial aid fraud occurs!!

Students who don’t attend andwhat this means to the College

Impacts our Default Rate Default rate is calculated by looking at the number of students who are

default on their loan and which school originated the loan. High default rate could cause COD to loose their eligibility to disburse

financial aid funds

High amount of receivables If it is determined after the student has received their funds – we back

the funds off the student’s account and return the funds to the Department of Education, which means the student now has a bill.

$354,000 has been lost to fraud in the past 4 semesters 39.3% of total delinquent accounts at COD

Affects the integrity of the financial aid program

If a student collects financial aid funds and never attends, stops attending class, or drops their classes – we may have to readjust their financial aid award, which may create an outstanding balance that the student owes. Why is this important?!?

Office of Inspector General reports

As of August 1, 2011, OIG had 100 open fraud ring investigations with 49 additional being evaluated for investigative merits

Since 2005, OIG has assisted in the prosecution of 215 participants in 42 different fraud rings resulting in criminal convictions and $7.5 million in fines and restitution

Summer 2012In Summer 2012, we began to notice various fraud rings involving financial aid recipients. What we discovered:

Students signing their refund checks over to one particular person “Straw” students

Financial aid documents being submitted for numerous students by the same person – whether by fax or email. Sometimes paperwork was submitted for people who were not even

admitted to COD Students signing up for online classes

Never “attending” class Securing the financial aid funds nonetheless

Identity Theft Some of these “fraud” students are now calling up saying they have never

heard of COD and someone stole their identity. As a result of student’s getting bills in the mail from COD.

Ring Leaders Solicit identifying information from individuals (often by promising a small portion of the

financial aid proceeds and/or from incarcerated individuals).

Complete and submit multiple financial aid applications (usually on-line using the Department’s FAFSA on the Web application) using the identifiers collected.

Target institutions with low tuition (i.e. public community colleges) or institutions that offer distance education programs

Apply for admission and completes registration process at “open admissions” schools where academic transcripts and test scores are not required

“Participate” in just enough online instruction to qualify for a disbursement of financial aid for the term or other payment period schools release financial aid credit balance, after deducting minimal institutional charges

Distribute proceeds to some of the individuals who provided their identifiers

Ring leader pockets most of the proceeds!!

A majority of the students we discovered: Live out of district

Predominately Chicago. There were some local groups that lived in Glendale Heights, Naperville,

Streamwood, Bartlett, etc. Are taking online classes that do not require the Math/Reading/Writing

Test (this is so they do not have to come to campus) Common classes seem to be Criminal Justice, Business Law, Computer

Information Systems, Education, Sociology, Psychology, etc. Have GED certificates, with some being received while in prison Report $0 income:

But claim to be supporting children or dependents When pressed for how they are supporting their family they all claim cash

payments for doing landscaping or cutting hair.

What Department of Education is doing . . New for 2013-2014

Flag potential fraudulent students to: Submit high school graduation transcript Statement of educational purpose for verification. Must meet with a Financial Assistance Representative Submit a copy of driver’s license.

Develop edits to flag potential fraud participants in the Department’s Central Processing System and National Student Loan Data System

What we are doing now Reported more than 100 students to the Inspector General’s Office for them

to review and determine the level and extent of fraudulent behavior Keeping a list of students we have suspected of fraud Institutionally selecting students for Verification

Household Size Tax Transcripts Non Filing Status Letters from IRS showing no tax return on file Copy of High School Diploma or GED Documentation of Social Security Benefits or Food Stamps received, if

applicable Checking signatures and names

Checking attendance and academic engagement before funds are disbursed Looking at number of blackboard hits Satisfactory Academic Progress

If a student Fails or Drops all their classes for the semester they automatically go on Financial Aid Discontinuance.

Contacting the instructors via email to request information regarding attendance or academic engagement

2) Is the student academically engaged in the class? Department of Education defines academic engagement as - submitting an academic assignment; taking an exam, an interactive tutorial, or computer assisted instruction; attending a study group that was assigned by the institution; contributing to an academic online discussion; and initiating contact with a faculty member to ask a question about the academic subject studied in the course. Merely logging into the electronic classroom or contacting the instructor to request an extension is not considered academically engaged.

1) Has the student begun attendance?Department of Education requires us to confirm that the student has begun attendance in their classes, if the disbursement occurs on or after the first day of the class

Before we disburse financial aid funds we check to see if the student . . .

What can faculty do??

Be aware that we may contact you to verify attendance and/or academic engagement

Help us to identify students who are not attending or being academically engaged

Suggestions????