TASFAA Community Blog

  • 24 Oct 2011 9:53 AM | Deleted user

    Publication Date: October 20, 2011

    DCL ID:  GEN-11-17 

    Subject: Fraud in Postsecondary Distance Education Programs - URGENT CALL TO ACTION

    Summary: The purpose of this letter is to provide guidance to address potential fraud in the Federal student aid programs at institutions of higher education that offer distance education programs. This letter provides an overview of the fraud schemes that the Department's Inspector General (IG) detected, and recommends immediate steps that institutions can take to detect and prevent fraud. In this letter, we also describe further actions that institutions can take and that the Federal government is committed to taking, including increasing technical assistance to institutions of higher education, the convening of a Department-wide task force on distance education fraud, and plans for recommending legislative and regulatory changes to address the relevant issues.

    Dear Colleague:

    We appreciate the efforts that institutions routinely take to protect the integrity of the Federal student aid programs.  Some of the fraud described in this letter was detected as a direct result of vigilant efforts pursued by institutions that have implemented comprehensive internal controls and fraud detection measures.  Despite these efforts, more needs to be done by all institutions to prevent, identify, and report suspected distance education fraud in the Federal student aid programs and enable the successful prosecution of offenders.  As evidenced by our recent work with the community on program integrity, we are committed to being a strong steward of the taxpayer investment in the student assistance programs and to ensuring their integrity.  For these reasons, the Department determined a swift response was necessary and, through this Dear Colleague Letter (DCL), we are asking for your continued partnership to eliminate this and other attempts to defraud the Federal st  udent aid programs.  It is imperative that institutions comply with all existing statutory and regulatory requirements to disburse aid only to eligible students, to identify and resolve discrepancies in student information, to ensure that all requirements regarding "regular student" status are met, and to report any suspected fraud to the Department's IG.  In doing so, your efforts will help curb these abuses and ensure that Federal student aid is provided to needy students as intended.

    On September 26, 2011, the Department's IG issued a report about fraud rings operating on distance education programs offered by institutions participating in the Federal student aid programs (http://www2.ed.gov/about/offices/list/oig/invtreports/l42l0001.pdf).  The IG's report identified an increasing number of cases involving large, loosely affiliated groups of individuals (fraud rings) who conspire to defraud title IV programs through distance education programs.  These fraud rings generally target institutions with low tuition in the context of distance education programs and involve a ringleader who:

    Obtains identifying information from straw students - individuals who willingly provide the information - including some who were incarcerated, by promising financial gain.

    Completes multiple financial aid applications using the information collected (name, Social Security number, date of birth, etc.).

    Applies for admission under the institution's open admissions program, where little or no third-party documentation is required.

    Participates in the amount of on-line interaction necessary to establish participation in the academic program and secure disbursements under an institution's procedures.

    Once the ringleader has submitted the Federal student financial aid application and completed enrollment at the institution, the institution draws down Federal student aid funds, deducts the institutional charges assessed the straw student, and disburses the credit balances to the straw student by check or debit card.  Straw students then give a portion of the proceeds to the ringleaders while keeping the remaining portion.  If needed to secure disbursements under an institution's procedures, a ringleader may also participate as the straw student in sufficient academic work to appear to be an eligible student.

    The IG's report found that complaints about distance education fraud rings are expected to continue, given that distance education is the fastest growing segment of higher education.  Institutions offer the front line of protection and are essential to the Department's efforts to thwart fraud and protect taxpayer dollars.  As you know, accrediting agencies are required to review the policies and procedures institutions have in place to verify the identity of the students enrolled in those courses and programs (34 CFR 602.17(g)).  Affected institutions should follow these reviewed processes to help detect efforts to defraud the Federal student aid programs.  We also expect institutions to take steps necessary to ensure that students are academically engaged prior to disbursing Title IV student aid funds.  If students do not begin attendance, Title IV funds must be returned  (34 CFR 668.21(a)).  We strongly encourage institutions that suspect potential fraud to question an appl

     icant's intent to seriously pursue the academic program by requiring the student to demonstrate that he or she has an academic purpose in order to establish eligibility for Federal student aid.  If a student does not demonstrate academic purpose or resolve other concerns regarding identity or eligibility, the institution should not disburse Title IV funds.   

    Detecting fraud before funds have been disbursed is the best way to combat this crime.  We therefore seek the help of institutions and advise that you take the following additional actions to identify and prevent the kind of student aid fraud identified in the IG's report:

    Implement automated protocols that monitor information in your student information data system to identify instances where a number of students -

    Use the same Internet Protocol (IP) address to complete and submit an admissions application.

    Use the same IP address to participate in the on-line academic program.

    Use the same e-mail address to submit an admissions application.

    Use the same e-mail address to participate in the on-line academic program Appear to reside in a geographic location that is anomalous to the locations of most students in the program.

    Modify your disbursement rules for students participating exclusively in distance learning programs, which would immediately reduce the amount that fraud ring participants can receive.  Institutions have the authority to:

    Delay disbursement of Title IV funds until the student has participated in the distance education program for a longer and more substantiated period of time (e.g., until an exam has been given, completed, and graded or a paper has been submitted).

    Make more frequent disbursements of Title IV funds so that not all of the payment period's award is disbursed at the beginning of the period.

    Our recent program integrity rules include two additional requirements that help identify potential fraud.  First, we now require institutions to have procedures in place to address what may appear to be a fraudulent claim of high school completion (34 CFR 668.16(p)).  Since we now collect high school completion information on the Free Application for Federal Student Aid (FAFSA), institutions can use these procedures to help detect potential fraud.  In addition, in the future, we may in our annual verification notice (which we publish in the Federal Register pursuant to recently-revised verification regulations found in Subpart E of 34 C.F.R. Part 668) specify certain additional items that would need to be verified, including high school diploma information and applicant identity for all or some of an institution's Title IV applicants who are engaged in distance education.  The selection of these applicants for verification may be based on common addresses and other patterns  and discrepancies noted in the OIG's investigations.  Institutions are encouraged to verify identity of individuals whenever the institution, through use of similar methods and triggering events, finds cause for doing so as a best practice for preventing fraud. 

    The Department is taking this issue very seriously and has established a Department-wide anti-fraud ring task force, chaired by Jeff Baker, Director, Policy Liaison and Implementation in Federal Student Aid, to address the issues raised in the IG's report as well as emerging future threats.  If you have comments and suggestions that you believe will help us address fraud rings or have specific concerns that do not rise to a level that you believe appropriate to refer to the IG, please contact the task force at FraudTaskForce@ed.gov or call 202-377-4340.

    Finally, we have added sessions to the upcoming FSA Conference in Las Vegas scheduled for November 29-December 2, 2011, to more fully discuss the IG report and possible institutional responses.  We plan to release additional guidance after those sessions and will also consider suggestions for additional statutory and regulatory changes to help institutions combat fraud and protect students and taxpayers from fraudulent activity.

    Sincerely,

     

    James W. Runcie

    Chief Operating Officer

    Federal Student Aid

       Eduardo M. Ochoa

    Assistant Secretary

    for Postsecondary Education 

  • 19 Oct 2011 8:23 AM | Anonymous
    Today, October 19, 2011 is nationally recognized as Financial Aid Day. As President of this association it brings me great honor to wish each member, colleague and friend a Happy Financial Aid Day.

    Please take a moment to celebrate what we have accomplished over the last 40 years but more importantly the last 2 years and the changes to our profession. We have handled that transition with class and dignity, said goodbye to a number of friends and colleagues in the lending industry - and welcomed some of them back to our side of the fence!

    Enjoy this day and make sure to update your social media sites to reflect today's events - we're having a party here at Tech! Enjoy!!!
  • 12 Oct 2011 2:42 PM | Anonymous

    TASFAA FALL TRAINING WORKSHOPS

    Hello friends and colleagues! TASFAA and TSAC are once again partnering together to provide training opportunities for financial aid administrators that will take place in three locations across the state. 

    http://www.tasfaatn.com/Fall

    Workshop West     Union University          Jackson, TN         November 9th  

    Workshop Central Lipscomb University        Nashville, TN      November 14th

    Workshop East    South College          Knoxville, TN             November 15th

  • 28 Sep 2011 9:13 AM | Anonymous
    Some Fall Training News - will share more in the next few weeks about when and where.

    We plan to hold three training workshops. These will be drive in one day sessions. The sessions will include a discussion on SAP using NASFAA training materials and and afternoon session with Wood Mason, DOE on loan reconciliation and DL Q & A.

    If you would like to assist by presenting or sitting on panel group - please send me your name and I will get you involved!

    Lester
  • 26 Sep 2011 2:57 PM | Deleted user

    We have been asked by the Department of Education to share this letter recently sent to College Presidents with our members.

     

    Click the link to view the attachment

    Attachment 1:  Gainful Employment Letter http://www.sasfaa.org/ListLock/fDhc6faES3SRZrs9.pdf

  • 21 Sep 2011 10:47 AM | Deleted user

    Clock Hour Definition 

    Under 34 CFR 668.8(k)(2) the Department formally defines what a clock hour program is for undergraduate programs.  If your program meets the definition, then, for Title IV purposes, it is considered a clock hour program and all clock hour requirements apply.  HOWEVER, policy recently clarified that 668.8(k)(2) does NOT apply to non-GE programs.  So it would apply to nondegree programs at all school types and, at for-profit institutions, it would also apply to their degree programs.   

    I am stressing this since I know within my region there are some public schools that have been converting degree programs to clock hour programs for Title IV purposes since it met the new clock hour definition.  Based on policy’s new guidance those degree programs at our public institutions would not have to administer Title IV aid in clock hours since they are not considered GE programs. 

    Gainful Employment 

    This is a reminder that ED will be hosting an upcoming Webinar on adding new GE programs.  This training will take place on September 26, 2011.  Please see the Dear Colleague Letter ANN-11-19 for more information. 

    Also, don’t forget that schools will be able to start reporting GE data through NSLDS as of September 26, 2011.  Please make sure your school will be able to gather and report to ED all the required GE data by October 1 (2006/2007-2009/2010 data) and November 15 (2010/2011 data), respectively.  For more information about reporting processes and timeframes please see the GE webpage at http://www.ifap.ed.gov/GainfulEmploymentInfo/index.html

    Net Price Calculator 

    Please don’t forget that all required schools must have a net price calculator up and running on their website by October 29, 2011.  Please see the Department’s NPC webpage for further assistance - http://nces.ed.gov/ipeds/resource/net_price_calculator.asp 

    FSA Handbook Changes 

    Based on some recent questions I have been receiving, this is just a reminder that our publication group often moves items around or removes information within the FSA HDBK to clarify data or enhance existing sections.  Please remember that just because a line item has been removed does not necessarily mean that the rule no longer applies.  It may have been redundant, or moved to a section better suited to describe the topic.  Any true changes in guidance will usually be accompanied by a CHANGE sign or a NEW sign designation.  And as always, staying up-to-date with the entire FSA HDBK is a must to properly administer aid. 

  • 19 Sep 2011 4:01 AM | Anonymous
    For quite some time I have been running around my office yelling the FISAP is due, the FISAP is due - in your mind's eye see chicken little yelling this if it helps! Well now my fined feathered friends and coworkers, the FISAP is due! We just got our SIS system upgrade that included the FISAP tables yesterday evening at 5 pm and so I am up at this bright hour of 4 AM working on it. I know a lot of you have this and many other things on your plate right now so let me leave you with a few words I find particularly helpful...

    "Enjoy the little things in life, for you just may realize too late that they were the big things!"

    Enjoy today!

    Lester
  • 16 Sep 2011 2:04 PM | Deleted user

    Hope everyone's September is going well.  I am in the middle of renovating a kitchen and all of a sudden financial aid does not seem as difficult as picking out colors, tile, paint, appliances, etc.  And somehow our final decisions all seem to be what my wife wanted in the first place.  Of course that might be my subconscious kicking into survival mode and leading me down the path of least destruction. 

    Anyway, I have a few topics I wanted to share.  For those schools with undergraduate programs subject to the new clock hour definition please pay careful attention to some updated guidance provided below.

    Clock Hour Definition

    Under 34 CFR 668.8(k)(2) the Department formally defines what a clock hour program is for undergraduate programs.  If your program meets the definition, then, for Title IV purposes, it is considered a clock hour program and all clock hour requirements apply.  HOWEVER, policy recently clarified that 668.8(k)(2) does NOT apply to non-GE programs.  So it would apply to nondegree programs at all school types and, at for-profit institutions, it would also apply to their degree programs.  

    I am stressing this since I know within my region there are some public schools that have been converting degree programs to clock hour programs for Title IV purposes since it met the new clock hour definition.  Based on policy's new guidance those degree programs at our public institutions would not have to administer Title IV aid in clock hours since they are not considered GE programs.

    Gainful Employment

    This is a reminder that ED will be hosting an upcoming Webinar on adding new GE programs.  This training will take place on September 26, 2011.  Please see the Dear Colleague Letter ANN-11-19 for more information.

    Also, don't forget that schools will be able to start reporting GE data through NSLDS as of September 26, 2011.  Please make sure your school will be able to gather and report to ED all the required GE data by October 1 (2006/2007-2009/2010 data) and November 15 (2010/2011 data), respectively.  For more information about reporting processes and timeframes please see the GE webpage at http://www.ifap.ed.gov/GainfulEmploymentInfo/index.html.

    Net Price Calculator

    Please don't forget that all required schools must have a net price calculator up and running on their website by October 29, 2011.  Please see the Department's NPC webpage for further assistance - http://nces.ed.gov/ipeds/resource/net_price_calculator.asp

    FSA Handbook Changes

    Based on some recent questions I have been receiving, this is just a reminder that our publication group often moves items around or removes information within the FSA HDBK to clarify data or enhance existing sections.  Please remember that just because a line item has been removed does not necessarily mean that the rule no longer applies.  It may have been redundant, or moved to a section better suited to describe the topic.  Any true changes in guidance will usually be accompanied by a CHANGE sign or a NEW sign designation.  And as always, staying up-to-date with the entire FSA HDBK is a must to properly administer aid.

    I hope you have a great weekend.

    DAVE

    David Bartnicki

    Federal Training Officer

    ED/FSA/Atlanta

     

  • 31 Aug 2011 11:19 AM | Deleted user

    FERPA and Your Students--A Beginner’s Guide

    By Dave Bowman, Regional Marketing Director

    Great Lakes Educational Loan Services, Inc

    For schools, the Family Educational Rights and Privacy Act of 1974 (FERPA) details the transfer of rights to access educational recordsundefinedfrom the parents of your students to the students themselves. Under FERPA, all education records (except directory information, in most cases) are confidential, and cannot be disclosed unless the student consents or the request fits an exception outlined by FERPA.

    While FERPA is a complex issue that requires research, here are a few things schools must know:

    Know the Student’s Rights

    The FERPA provides several rights to students with regard to their education records, including the right to access, review, and request amendment of their education records, and demand records be disclosed only with student consent. FERPA also gives students the right to file complaints against the school for disclosing education records in violation of FERPA.

    Know the Parents’ Rights

    Unlike students, parents do not have automatic access to their child’s education records even if their students are dependent students.

    There are a few instances that do allow access to parents, including if the student has provided written consent. Under certain circumstances, as outlined in the FERPA, full rights may be given to the parent at the school’s discretion.

    Know Your School’s Responsibilities

    There are steps that schools must take to ensure that they are complying with FERPA:

    • School faculty and staff must have a legitimate educational interest to see a student’s education record, or meet an exception outlined by FERPA.
    • Know your definitions. FERPA defines: school, eligible student, attendance, dates of attendance, disclosure, and the different types of records and student information.
    • The school must respond to a student request to view education records by:

    •o    Providing copies (or other arrangements) of applicable education records (exceptions outlined in FERPA) within 45 days of the receipt of the request.

    •o    Not charging a fee for the record search (but may charge a copying fee).

    •·         Know what to do when a student asks to amend a record. The school must:

    •o    Decide within a reasonable timeframe.

    •o    If approved, amend the record as requested.

    •o    If denied, inform the student or parent of their right to a hearing, and

    •o    Allow the student or parent to insert a statement in the record, if denied after the hearing.

    • Notify students in attendance of their FERPA rights annually.
    • Review campus policy annually.

    Know Where to Learn More

    FERPA compliance help is available. You can email your compliance questions to the U.S. Department of Education at ferpa@ed.gov.

    FERPA information is available from several sources:

    You may also wish to consult your campus legal counsel, as this article is intended to provide general FERPA information only.

    By following these guidelines, and becoming familiar with FERPA, schools can ensure that the privacy of students’ confidential education records is protected.

  • 30 Aug 2011 9:51 AM | Anonymous
    Wanted to take a second (cuz that is all we have) and say good luck to my colleagues across the State as you welcome new students, welcome back continuing students and saying good bye to those summer days.

    We at Tech, started our semester yesterday, had our highest freshman class ever (1915 - which is significant since we were founded as Dixie College in 1915 and this class is the class of 2015 - our 100th!). I hope the start of your semester goes well.

    We are working on some things for training in the next few months so look out for those and we also will be posting the NASFAA Presentations on our website - you'll get a chance to see the actual video presentation and have the handouts - cool!

    Looking forward to seeing all of you in the coming months, please let me know how TASFAA can work for you!

    Peace,

    Lester
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