Fraud: Financial Aid and Online courses . . . . and how faculty can help

1. Fraud: Financial Aid and Online courses . . . . and how faculty can help Presented by: Jennifer Prusko, Financial Assistance Representative Janet Pagan-Klehr, Financial Assistance Coordinator

2. What is Financial Aid? Grants Loans Scholarships Work Study/Student Employment

3. 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

4. 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.

5. 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

6. Books and Financial Aid Book 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

7. Refund Checks Any 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 =$ 1,396.50 Pell Grant =$ 2,082.00 Sub Loan =$ 1,734 Unsub Loan =$ 2,970 -------------------------------------------------- Refund Check =$ 5,389.50 And this is where the financial aid fraud occurs!!

8. Students who don’t attend andwhat this means to the College 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?!? • 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

9. 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

10. Summer 2012 In 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.

11. 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!!

12. 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.

13. 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

14. 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

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

16. 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????