Education Department to Convene Rule Making on Fraud

April 6, 2012

Although negotiated rule-making on teacher preparation programs isn't yet complete, the Education Department plans to announce another round soon on distance education fraud. Department officials said at negotiations Thursday that plans for more rule-making are underway, and higher education lobbyists said it will focus on financial aid fraud rings. The rings  use "straw students" who enroll with no intention of attending classes, usually in online courses at open-access institutions. They then apply for federal aid and split the proceeds. The fraud rings have become a growing problem as online education has boomed, but some worry that a crackdown could endanger legitimate students' access to federal aid.

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