With a new financial aid scam on the rise, USF officials need to stay vigilant to ensure the’University doesn’t fall prey to fraud.
Trenda L. Halton of Phoenix pleaded guilty this month to’conspiracy, mail fraud and’financial aid fraud for a con that swindled $538,932 in student aid from the federal government.
The scam was complicated,’but it proved profitable for Halton and her four accomplices. She targeted Rio Salado College in Arizona’s distance’learning program. Halton’s associates recruited potential ‘straw’ students to apply to the college for financial aid.
According to the indictment, she was able to find 136 potential straw students who used fake personal information to apply to Rio Salado and financial aid in an attempt to get Stafford Loans and Pell Grants.
Halton enrolled the students in online classes and participated in them long enough for financial aid to be disbursed, according to court records. Then she took the leftover money intended for’education-related expenses after tuition was paid and was’ distributed to the students.
The extra money could add up to thousands of dollars per student, Linda L. Ross, Rio Salado’s former financial aid director, said to the Chronicle of Higher Education.
Fake students received money without having to take classes, and Halton and her accomplices got a cut in return. According to court records, she received between $500 and $1,500 per student. She was ultimately caught and the investigation led to the indictments of 65 people. But the fact that she was able to scam more than $500,000 shows the importance of policing financial aid and distribution.
Determining whether a student in an online class is legitimate is a ‘significant challenge,’ Mary Mitchelson, acting inspector general at the U.S. Education Department, said to Congress in October.
Mitchelson told Congress her office had opened’29 distance-education investigations since 2005 and 19 were in the past two years.
The University of Phoenix’s Axia College, Michigan’s Lansing Community College and Texas’ Dallas County Community College were victims of online financial-aid fraud between April and September 2009, according to the inspector general’s report to Congress.
The distance learning program at USF, which supports more than 84,000 annual enrollments, according to the University Web site, shouldn’t consider itself immune.
But USF should be praised for launching the Office of University Scholarships and Financial Aid (USFA), which monitors financial aid and should be able to root out any suspicious behavior.
The office was established in July to review, approve and’package all financial aid given to students. Created to ensure students weren’t getting more money than they actually needed, this is a good safeguard and it only required the hiring of three new positions.
However, such an office will be useless if it cannot effectively police student activity. USF officials must ensure that online classes aren’t abused.