This is an interesting article from the NY Times about fraud rings that have popped up, exploiting federal financial aid resources. http://www.nytimes.com/2011/10/06/opinion/fraud-and-online-learning.html
The whole financial aid (government-provided student loans, to be exact) system need to be revamped so that schools are held more accountable, not changed so that monies left after tuition is paid are not returned to students. The article implies that because online students do not incur addition costs for housing - for example, that financial aid should be changed such that housing is not included in a student's COA calculations. Is this not the same reason why some DL programs charge yearly tuition that equates to the amount of government-provided student loans (20k per year for grad school, for example), to ensure that no monies (left over after tuition is paid ) are refunded to the students? While limiting what goes into COA calculations may work for online-only schools with no physical campus, how would such change be implemented if an online student at a B & M school decides to attend on-site classes, which happens a bit? This issue is not wide-spread; I think holding schools more accountable as to who they give out loans to should be the focus. I see issues like this occurring more at for-profit schools, since money is usually a larger percentage of why they are in operation. Some for-profit schools would process student loans for any person that "pops up" even when admission requirements are not met, complete or even received by the school. Trident University is one example. The issue they have with WASC presently has to do with enrolling students who either didn't meet program requirements, or paperwork was simply not turned in or received by the school, but they were allowed to enroll/graduate.
There is widespread fraud in all government subsidized programs including medicare and social security. One does not tend to be very discriminating when spending another's money.
I agree. That is why those benefiting from the status quo do not want the government to change any bit of it. For example, I have personal knowledge as to how healthcare providers who participate in medicare engage in fraud, because of serious lapses in the payment process. One known and very easy way of defrauding medicare is to send a bill to the government, where the government pays without verifying paperwork or that a prescription even exists in the first place. And if found that the payments should have not been made, which occurs after many months (the government pays for claims, and then attempts to verify paper work lately), the only penalty or punishment is for the company to return part of all the money. That is why DME companies (durable medical equipment, commonly called medical supply company); for example, are milking the system dry, and many who operate this small "store front" medical equipment business are immigrants. I know several cases where operators (many of the small medical supply companies are one-man operations) of this scam billed the government millions and then leave the country before anything else happens. Texas medicare scam, by mostly Nigerians, is another clear case (the number of fake wheelchairs that were billed for by the scammers and paid for by the government, equated to 6 wheelchairs for every Texas resident/family). A very disgraceful way to spend our tax dollars! In the case of fraudulent student loan disbursements, schools do not want the government to change the status quo because it serves them right. And ofcourse, as with many other government interventionist programs, the very people that the programs were created to help end up suffering while a few game and profit immensely from the fraud.
