Over the past few months, there has been a rise in concern about ghost students.
Ghost students are individuals who enroll in an institution without the intention of completing any coursework, seeking a degree, or obtaining any certification, but solely to fraudulently obtain financial aid. According to a recent press release from the U.S. Department of Education (ED) it stated that, “a recent comprehensive analysis uncovered nearly $90 million disbursed to ineligible recipients.”
This is another headache for the higher education sector, which has had challenges over the past few years with maintaining a robust and healthy enrollment. While many institutions have been reporting increases in both applications and enrollment over the past two years, it is important to dig into those upticks to ensure that you are not being ghosted.
Institutions can focus on the following to detect potential issues:
- Look for unexplained surges in applications, FAFSA applications or course enrollments that do not match your institution’s efforts to grow enrollment;
- Examine website traffic data for surges from overseas or outside your normal recruiting areas;
- Identify classes that are quickly and completely filled within minutes (or less) once enrollment opens;
- Look into students enrolling in online-only or similar options who do the minimum to stay enrolled (e.g., basic online forum posts that do not align with the content or requirements.)
Although ED has recently made changes to the FAFSA process to better identify individuals seeking to perpetuate fraud, it is important to remain vigilant. This issue, coupled with proposed legislation on cost sharing of student loan defaults, could cause a significant issue for institutions’ budgets in the future if that proposed legislation is enacted, and if these types of frauds exist or persist at an institution.
Although institutions have been targeted across the country, recent articles from Fortune and EdTech have highlighted the heightened vulnerability for community and technical colleges due to their enrollment models. Many of these institutions typically do not require an application fee and are typically admitting any and all eligible students, which makes it easier for fraudsters to perpetrate these schemes.
Although the focus is on preventing fraud, ghost students can disrupt your existing student population, making it difficult for them to complete coursework due to unavailable classes, causing other issues with student satisfaction and degree completion/graduation rates.
This is another reason to remain vigilant as risks within the higher education sector continue to evolve. A robust cybersecurity program, appropriate training for your financial aid professionals and engaging with the academic team will be important in both preventing and detecting these types of issues. The advisors at Schneider Downs can assist you in identifying and making recommendations on vulnerabilities to ensure that your institution isn’t ghosted.
About Schneider Downs Higher Education Services
The Schneider Downs Higher Education industry group is a dedicated team of experienced professionals specializing in serving institutions from high schools to universities. Our experience in audit and assurance, tax advisory, technology and data and more allow our professionals to stay ahead of the latest trends, developments and challenges within the education sector and provide timely and practical solutions to our clients.
To learn more, visit our Higher Education Industry Group page.
