News - Financial Aid Fraud

Henry Ford Community College is actively addressing the issue of the fraud scams that have been hitting the school and causing a deficit. Because community colleges have such a huge payout when it comes to financial aid, it makes HFCC an easy target.
According to Kevin Culler, the Director of Enrollment Services and Financial Aid, it has been estimated that 13 to 16 percent of financial aid recipients in this school are not successfully completing any of their classes each semester, which is about one tenth of the student body. The fraud gig is simple: people apply for school, usually using someone else’s personal information such as a social security number, with no intention of completing the classes in which they enroll. Afterward, they wait to get the refund check and then run with the money.
Once the school finds out the person isn’t attending class, they attempt to bill them for the classes and get the financial aid money back, but the money is lost because said person applied under false pretenses. HFCC is suffering by losing out on tuition and fee revenue as well as the financial aid money the school is responsible for paying back to the government. This is known as individual fraud as it involves one lone person playing the system for personal gain.
In extreme cases, at colleges other than HFCC, there are fraud rings. These are less frequent than the individual variety and they are the heavy hitters of the bunch. The gig is the same but there are multiple people involved. After several of these fake students collect their refund money, they pay a fee to the ring-leader or person who sets the scam up. This setup is similar to a pyramid scheme.
There have been many attempts to stop or prevent these frauds from happening. Teachers have been taking attendance to see who actually comes to school. While many teachers have already been doing this in accordance with specific department rules, it was just recently passed as a mandatory school wide policy.
The financial aid office has been on high alert, looking for anything that doesn’t make sense or add up. Individual frauds don’t make it easy: they have been known to stick around in class longer to ensure everything looks good before they cut and run. Sometimes this lasts a few more weeks or well into the semester.
If these people don’t get their money, they don’t give up so easily either. These fake students have a tendency to put the pressure on both the teachers and office of payout, demanding the cash. They will use every excuse in the book to get that money at all costs.
Online classes are an even bigger threat than normal classes. Since the students are not required to have a physical presence in a classroom, it is easier for them to cheat. Some people are able to move from one college to the next, successfully cheating them. This is referred to as “swirling” or “pell runners”.
Financial aid fraud causes big losses not only to our college, but to others as well. The school is losing serious figures and the deficit affects everyone. The attention needed to stop these frauds is demanding and the attempt to prevent it can undermine innocent people in need of government aid.
Even with this happening at HFCC, there is a positive angle. Around 16 percent of financial aid students are cheating the school. But that also means about 84 percent are doing the right thing, so there is still hope.
There is still much work to be done and the effort needed to detect and prevent this from happening will be difficult, as these crimes keep evolving. Perhaps the biggest challenge will be how to stop people from abusing the system without hurting the other people who are serious about getting an education.