My NacuboWhy Join: Benefits of Membership

E-mail:   Password:   

 Remember Me? | Forgot password? | Need an online account?

Business and Policy Areas
Business and Policy Areas

ED Issues Urgent Call for Action on Fraud

October 21, 2011

In response to the recent Inspector General’s report on fraud rings in distance education, the Department of Education issued a Dear Colleague letter (GEN-11-17) on October 20 urging institutions to help curb abuse. The letter notes that many of the fraud rings uncovered by the IG were detected as a result of the vigilance of institutions with comprehensive internal controls and fraud detection systems.

The letter cautions institutions that they must comply with all existing statutory and regulatory requirements to:

  • disburse aid only to eligible students
  • identify and resolve discrepancies in student information
  • make sure student status requirements are met
  • report suspected fraud to the IG

ED also suggests a number of actions that institutions can take to help detect fraud rings in distance education:

  • Implement automated protocols to monitor information in the student information system to identify where multiple students use the same Internet Protocol (IP) address or email address to complete admissions applications or participate in online classes, or appear to reside in an unusual location.
  • Modify disbursement rules for students in distance education programs.
    • Delay disbursement to require longer and more substantial participation.
    • Make more frequent disbursements across the payment period.

These actions are recommended, but are not required by regulation. ED has charged a task force with developing a concerted response to the increase in fraud in distance education programs; it may recommend changes to existing regulations and procedures.


Anne Gross
Vice President, Regulatory Affairs