Scams targeting Pell Grants and federal loans for college students have surged, as lawmakers pour more money into higher education to shore up flagging enrollment.
According to the LexisNexis Risk Solutions’ Government Group, which works with federal agencies to combat the schemes, phony student aid applications have netted about $100 million using the names of unsuspecting identity theft victims over the past 12 months.
“It’s been going on for decades, but it accelerated during COVID, when no one had to go to school in person,” he added. “It’s really easy to get this money online. It’s not a hard lift.” “The Department continuously takes steps to protect the integrity of the federal student aid programs,” an Education Department spokesperson told The Times. “Among other efforts, we regularly work with law enforcement partners to detect, investigate, and prosecute fraudsters, and we also regularly emphasize to financial aid professionals the importance of fulfilling verification requirements, particularly those focused on identity and fraud.
The mules also steal personal information from U.S. Postal Service mailboxes to create fake IDs. That allows them to fetch information about the victims from credit bureaus and banks. “I would say 90% of the fraud happens at the community college level because every applicant gets in,” said Mr. Talcove of LexisNexis. “It also happens at schools offering remote learning — any school with easy and open admissions.”According to the California Community Colleges Chancellor’s Office, about 20% of applications to the Golden State’s 116 community colleges are now scams. That includes more than 460,000 of the 2.
“It’s more difficult to scam money from the banks than the government at this point,” said Mr. Maimon, who directs the Evidence-based Cybersecurity Research Group at GSU. “The criminals brag about it, posting screenshots of their aid letters on the dark web. The government has improved since the pandemic started, but the criminals have improved as well.”
State funding for public universities grew 4.9% without adjusting for inflation last year and surpassed pre-recession spending per student for the first time since 2008, the State Higher Education Executive Officers Association reported on May 25.
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