Online colleges ‘wage war’ with student aid fraudsters


Bustamante said the leader of a fraud ring was convicted and sent to prison for three years after Rio Salado officials reported suspicious activities to the federal government and an investigation proved successful.

Before the fraud was discovered, Rio Salado’s financial aid officers were bombarded with phone calls from the same area code during course registration.

The frequency of registration requests from students with suspicious records forced the community college to adopt its application ban on four states.

“It’s not like we really need the business outside the state of Arizona,” he said, adding that the school would not seek authorization for its online programs in those states. “The risks are just too high.”

Rio Salado admissions officers now check the IP addresses and physical addresses of incoming students, checking for instances, for example, of a dozen students registering with an address of a one-bedroom apartment.

Bustamante said the school also uses Google Earth to scope student addresses and ensure they aren’t registering from a warehouse or undeveloped property.

The anti-fraud team formed by the University of Phoenix has identified more than 800 fraud rings nationwide in recent years, Berg said, with 16,000 people involved in those student aid fraud attempts.

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