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Friday Follow Up
Financial aid fraud, more positive enrollment news, Chegg calls its own AI bluff, and GCU vindication
Phil Hill
November 15, 2024
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As a reminder, we’re holding a live podcast-style webinar on Monday, November 18th, at 10am PST / 1pm EDT on the likely impact of the election on EdTech. This is only for On EdTech+ premium subscribers - you can register at this link. This is a great chance for free subscribers to try out premium, which is only $10 per month or $100 per year.
In the meantime, our friends at WCET put out a useful blog post today that explains not just their views of regulatory impacts but also an explanation of the different types of changes and how long each might take.
Financial Aid Fraud Increasing
In Kevin’s coverage of Educause, he took a use case approach of looking for particular problem to solve and seeing what EdTech vendors might be addressing it. Being the cheery person he is, he described the increasing problem that colleges and universities face with financial aid fraud.
Not all AI news is good news. In particular, AI has exacerbated the problem of fraudulent enrollment--i.e., rogue actors who use fake or stolen identities with the intent of stealing financial aid funding with no intention of completing coursework. First these 'ghost students' apply to colleges and then register for classes if their applications get accepted. If they can stay in a class until the census date (the last day students can be dropped for non-participation), then they get a financial aid check. A few years ago these criminals might at least get caught by the class census date. Now the scammers are submitting AI-generated essays to avoid being dropped for non-participation.
Spoiler alert - Kevin found few vendors knowledgeable about this problem and even fewer with products that might help. Not zero, but not much more than that - a hole in the EdTech market.
Even if the EdTech vendor community is not addressing this problem yet, the topic is gaining some traction. On Wednesday there was an article in EdSource about this problem and its impact on the California Community College System, including some specifics on financial impacts.
The $7.6 million is up from about $4.4 million that was reported lost all of last year. And that was much larger than the $2.1 million that was reported lost between September 2021 and the end of 2022. September 2021 is when the state chancellor’s office asked colleges to begin reporting monthly about application, enrollment and financial aid fraud. EdSource requested those reports via the state’s Public Records Act. In response, the state shared data on the amount of fraud reported each month but redacted the names of individual colleges.
