Last week, Los Angeles Times reporters Teresa Watanabe and Colleen Shalby co-authored an article indicating that more than 65,000 fake students applied to community colleges in California over the past few months.
The article indicates that a California Student Aid Commission (CSAC) official, Patrick Perry, had begun a routine check of federal aid records when he noticed that there were 60,000 more aid applications this year versus last year for a specific profile of applicants. The profile was first time applicants, older than 30, who earned less than $40,000 and were seeking a two-year degree, not a certificate. These applicants were spread across the California Community College System and had applied to 105 of the 116 campuses.
Mr. Perry, the director for the CSAC, states that he did not know if any financial aid was distributed. However, he also believes that the fake student fraud was caught before “much, if any, aid was distributed.”
The article further reports that faculty members at institutions had begun questioning whether the students who had registered for their online courses were real or not. One journalism professor reported that after screening for fraudulent students, her class is down to six legit students from the total of 45 who had registered.
The similarities in this case remind me of the roughly four-year period (2010-2014) when online programs were pursued by Pell runners. The most frequently pursued programs were at the lowest tuition schools, which were generally community colleges but not in all cases. American Public University System (APUS), the institution that I led, discovered similar fake “students.”
Automated screening systems have been put in place by many institutions with online programs to look for information that could identify fake students, such as:
- Similar physical addresses and phone numbers used by multiple students
- Similar URLs for the computer that a student used to apply and register for aid
- Limited activity in classes
- Similar or plagiarized answers to assignments like introductions
If there are criminals involved with fraud rings, it’s no surprise that they have become more sophisticated. The article mentions that the California Community College System is beefing up its internal reporting and security measures after noting that “20% of the recent traffic on its portal for online applications was ‘malicious and bot-related.’”
Given the size of the California Community College System and the numbers of students that its 116 colleges enroll, I would not be surprised if it is eventually disclosed that some funds were disbursed to whatever group is perpetrating this fraud.
During the period of Pell runners, the Department of Education cooperated with institutions to determine and clarify what policies they could put in place to reduce the opportunities for nefarious characters to perpetrate fraud.
In addition to the automated screening systems I mentioned earlier, some institutions requested copies of drivers’ licenses and utility bills in order to manually check that the information submitted matched some form of government documentation and other information linking the students’ names to their addresses. It took months and years in some cases to implement changes in policies, as well as to modify institutional student information systems to accommodate those changes.
One of the changes that the Department of Education made was to increase the frequency of requests for institutions to verify tax returns before approving financial aid disbursements for online students. In July of 2021, the Department indicated that it was going to reduce the frequency of verification requests to make it easier for at least 200,000 low-income students to gain access to federal aid.
The same day that the LA Times reported on these community college fake students, the Washington Post reported that the Department was changing its mind on easing the verification requests. I doubt that the timing of that announcement was coincidental.
One additional payment source added to the financial aid funding is the COVID-19 relief money authorized for college students. Given the relatively recent availability of these funds and the frequently changing guidance for eligibility and disbursement of these funds, it is possible that the organizer(s) of this fraud schemed to take advantage of the fact that much of the work to distribute these funds is manual and not automated. It does not have the appropriate checks and balances like distribution of Pell grant checks.
If some funds have been distributed to the criminals perpetrating this fraud, I hope the Department of Education and California provide details to all colleges and universities offering online courses and programs. Based on my experiences, I have a feeling that the fake student registrations were not directed at only California’s community colleges. Hopefully, every institution offering an online degree program is sifting through their recent application data to see if any similar instances exist.
