Thieves Scam Aid From Online Education Sites

The Department of Education says that as distance learning has grown so has fraud. An inspector general's report found that scam artists are taking advantage of the popularity of online education to steal federal education money.

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Studying for a degree online, known as distance education, is growing fast. And so is distance education fraud. Government investigations find enrolling on the Web offers a level of anonymity that makes it easier for thieves to rip off government aid, as NPR's Larry Abramson reports.

LARRY ABRAMSON, BYLINE: Even if you're going to a brick-and-mortal school, you can apply for financial aid without showing up in person. You just have to supply a valid Social Security number and some other information and you can do it online.

Now, traditional schools would require transcripts or other information that might stop a thief. But online community colleges are open to everyone, so no transcripts are required. Criminals have noticed this, so they are recruiting people who would be eligible for grants and loans. Kathleen Tighe, inspector general for the Education Department, says once the online school takes its fee, it gives the rest of the money to this fake student.

KATHLEEN TIGHE: The student is supposed to use that money for things like room and board, books and other educational expenses.

ABRAMSON: In a growing number of cases, the student drops out of school and splits the money with the ringleader. Kathleen Tighe's team has already recovered over $7 million from 42 different fraud rings. But Tighe is convinced this kind of fraud is much bigger than that.

TIGHE: We received a recent referral from one school that potentially has 600 fraud rings with as many as 10,000 participants. That's huge.

ABRAMSON: Contributing to the growth is a jump in the number of online students, particularly at community colleges. These low-cost schools are ripe targets. With little money going to tuition, there's more for the fake students to run off with.

At Rio Salado Community College, based in Tempe, Arizona, more than half of the school's 70,000 students enroll in online courses. Kishia Brock, Rio Salado's vice president of student affairs, says at her school a fraud artist approached people who could qualify for aid and said...

KISHIA BROCK: I can get you some money that you're entitled to and all I need is your personally identifiable information.

ABRAMSON: Brock says the school helped investigators turn up 64 different scammers who were all indicted and convicted. In some cases the fake students were not even high school graduates and some were illiterate and couldn't even read a verbal statement to investigators.

OK, so obvious solution - make students show up in person for their aid. Kishia Brock of Rio Salado Community College says her school is trying to open the door to students who can't get to her campus.

BROCK: You still want to have that open door to provide access to higher education. However, these rings of fraud require that institutions start to figure out a way to launch some barriers or some safeguards.

ABRAMSON: The Department of Education is studying the fraud report. While the administration doesn't want to let theft continue, officials also don't want to stand in the way of a larger goal - getting more students enrolled in higher ed.

Larry Abramson, NPR News.

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