Online Education's Fraud Problem

Distance education makes learning more convenient for those with tight schedules and budgets. In allowing for wider access to education than ever before, it's a revolutionary addition to the collegiate landscape. Unfortunately, it's also opening up a new avenue from which criminals can profit.

By Sarah Wright


Online Fraud - Education Style

Everyone knows that the Internet isn't the most secure thing in the world. There's an inherent risk to conducting a financial transaction online, but businesses and services tend to do everything they can to make their customers feel safe handing over financial information. But that doesn't stop fraud from happening on both sides of a transaction, and according to The New York Times financial aid fraud facilitated through online education is becoming increasingly popular.

'Straw Students'

The Times uses Michelle Owens as an example of the identity theft plaguing online education. Ms. Owens used the identities of 23 individuals to apply for financial aid through Webster University. All 23 students - 'straw students' standing in for Owens - were admitted and granted aid totaling more than $500,000. The fraud was discovered by a Webster employee who was curious about the large volume of applications for students at a single address.

This case is hardly a standout. According to The Times, 42 financial aid fraud rings have been uncovered since 2005, with about 215 individual participants convicted of crimes since then. The 'straw students' used by these crime rings may be willing participants with no intention of attending school, or they may be unwitting victims of identity theft. As of August 1, 2011, the U.S. Department of Education's Inspector General had opened 100 cases into distance education fraud.

Should You Be Concerned?

Though this new trend is disappointing, even discouraging, there's no need to feel unsafe taking classes online. If you're a distance education student you'll simply want to take the same precautions you would while conducting any sort of financial and identity-based transaction online. Make sure to check your credit card and bank statements and get a yearly credit report to stay on top of any potential identity theft.

Beyond any personal impact, though, this news should be cause for concern to all U.S. taxpayers. Given that our resources are already stretched so thin, it's disheartening that anyone would take advantage of a system created to help those in need. Hopefully, the backlash against this new crime wave will stay focused on the criminals, and not on honest students relying on financial aid to complete school.

If you're still hesitant about distance education, consider the fact that a Harvard professor has encouraged the use of online education.

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