Schools struggle to protect against financial aid fraud

The state’s community colleges requested $75 million in one-time funding and $25 million ongoing.

By Isaac Dektor, News Editor

SECURITY- California’s community colleges seek to develop stronger safeguards against financial aid fraud. (Graphic illustration by Isaac Dektor/The Valley Star)

California’s Community Colleges recently included $100 million for cyber security funding in their 22-23 budget request following widespread fraudulent applicants receiving aid money.

False applications were submitted to the tune of 65,000 according to the Los Angeles Times. Nearly all of the state’s community colleges were targeted, including eight out of the nine LACCD schools. The Peralta Community College district alone distributed $179,000 in financial aid to fake students, according to Edsource.

The scam works like this: a surge of fake applications are submitted through bots or software that is programmed specifically for a task. If successfully admitted into the college, the bots enroll in 9-12 credits and apply for financial aid. Once the funds are received, the fictitious students drop out and take the money with them.

The 2022-23 budget request states that cyber attacks on schools are on the rise and asserts that institutions must be more secure in the age of virtual education.

“Technology infrastructure, both at the system and local level, and the pandemic have further exposed vulnerabilities, especially as cybersecurity attacks have grown worldwide,” reads the document.

The requested funds, if approved, will be used to renovate CCCApply - the program exploited by online criminals engaging in admissions fraud - and to invest in a “statewide financial aid verification platform,” according to the budget request. Additionally, funds would be used to create a more robust infrastructure around technology and data security.

President Barry Gribbons described the safeguards the district uses to defend itself against the growing sophistication of bots and financial aid fraud.

“The most effective way that we have to guard against it is to confirm that students have shown up to class and having the instructors drop students who don't show up the first two weeks,” said Gribbons. “But we oftentimes will catch bots even before that. For example, we might see 20 new accounts get created from the same address, and that’s when that will be flagged.”

Nearly half of educational institutions around the world were targeted by hackers attempting to gain access to school funds and data using ransomware according to Edscoop. Over half of the hackers successfully encrypted data from those institutions that were targeted.

The U.S Department of Education announced in July that verification requirements for financial aid documents would be slackened in order to increase access amid the pandemic.

“Department research shows that targeting verification this aid cycle, can help approximately 200,000 more students from low-income backgrounds and students of color enroll in college and continue on the path to a degree,” read the statement.

While the lax verification process for FAFSA may increase enrollment - specifically of marginalized groups - it has had the unintended repercussion of being exploited by hackers in order to defraud schools and taxpayers throughout California.

Valley student Eliana Levi, who majors in psychology, believes that preventing people from exploiting the financial aid system is of the utmost importance.

“We need to make the system safe ASAP, even if it comes at the cost of eliminating these programs,” said Levi. “This mistake is really costing taxpayers and it's a bummer.”