How Online Colleges Fight Financial Aid Fraud

January 30, 2012

WASHINGTON -- A panel of online higher education leaders on Friday described complex and expensive safeguards they are using to prevent financial aid fraud. "We're engaged in warfare" to combat increasingly sophisticated fraud rings, said James Berg, a vice president and chief ethics and compliance officer for the Apollo Group, Inc. The scale of fraud attempts can be daunting: Wallace Boston, president of the American Public University System, said his university last August received 68,000 phone calls from two ZIP codes in Mississippi, the vast majority of which were likely fraud-related.

Excelsior College and the United States Distance Learning Association hosted the daylong meeting. Panelists, who were drawn from a sector-crossing range of institutions, stressed the need to be proactive about curbing fraud. Otherwise, potentially onerous federal regulations could be enacted, and online higher education's credibility could suffer. "This provides fuel for those who are critical of online education," said John Ebersole, Excelsior's president.

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