Fraud pushes California’s community colleges to consider an application fee. Is it worth it?

Under scrutiny from state and federal lawmakers, California’s community colleges are trying to crack down on financial aid fraud. Scammers have increasingly infiltrated the state’s 116 community colleges, posing as students in an effort to steal financial aid from the state and federal government.

At a meeting Tuesday, the board that oversees California’s community colleges voted to require all students to verify their identity, which is currently optional for most applicants. The board also considered asking the Legislature for approval to charge students a nominal application fee — which many said should be no more than $10. But after more than two hours of debate, the board rejected that proposal and instead asked staff to “explore” a fee policy.

“Some of you were asking questions, ‘Why is this happening so fast?’” said California Community Colleges Chancellor Sonya Christian. “Because on April 8, CalMatters ran an article that got national press. Guess what happened after that? Nine of our congressional leaders emailed the Secretary of Education of the United States and emailed the Attorney General asking them to start an investigation of the California Community Colleges.”

State representatives from both parties have since called for an audit of the community college system’s financial aid process. Christian said those audits are likely to happen. “We’re on a national stage right now.”

Students from across the state told board members that they were against imposing a fee, sharing stories of times when they were so poor that they didn’t have a bank account or $10 to buy lunch. Many had personal experiences with fake students.

“A bot once took my seat in a class that I needed to graduate and transfer. That fraud almost cost me my future,” said Flo Cudal, a student at Santiago Canyon College in Orange County. “I understand the need for strong protections, but they must not come at the expense of excluding a real student.”

When Love Adu, a student and board member, tried to enroll at Moorpark College, she said she was unable to verify her identity online, so she had to drive five hours to present her documents in person. Incarcerated students, undocumented students, homeless students and students under 18 all struggle with the current ID verification software, she said. “These proposals would make it harder for students to get the very education that we're trying to serve to them.”

Application fee delayed

California’s community colleges have a mission to serve every Californian and they’re funded primarily based on the number of students they enroll. When applying, students sign an affidavit affirming that their personal information is true. But besides that, only a few college districts mandate online identity verification. There is no fee to apply to community college and tuition is free for low-income students. Once enrolled, a student can obtain thousands of dollars in financial aid, money that can be used to cover the cost of books, housing, food and transportation.

That aid has become an easy target for scammers, who often submit dozens or hundreds of applications at a time, using real California addresses and Social Security numbers in order to create fraudulent college accounts. Last month, CalMatters reported that roughly one-third of community college applicants were fake. The state chancellor’s office said it removed all the fraudulent applicants it detected but many scammers evaded detection and stole taxpayer dollars. In the last 12 months alone, colleges have lost more than $10 million in federal aid to fraud and $3 million in state aid, according to state reports, which CalMatters obtained through a public records request.

Allowing fraud to continue to rise is “irresponsible,” said board member Amy Costa before voting in favor of Christian’s proposal. These “bots” are after government entitlement programs, such as Pell Grants and Cal Grants, and it’s the state's job to help steward the use of those taxpayer dollars, she said. “We need somebody to say ‘I’m a real person,’ and payment is sort of one of the ways we do that.”

In the proposal, Christian said her office would consider refunding or crediting the application fee to any student with “a demonstrated financial hardship.” Roughly 40% of California’s community community college students qualify for free tuition because they’re considered low-income, according to state data.

Even if the fee proposal had passed, Christian would still need the Legislature’s approval. It would have taken a year and involved many more discussions, including at the board level, Christian said.

But if lawmakers continue to keep the spotlight on this issue, changes could still happen, said Chris Ferguson, an executive vice chancellor with the state chancellor’s office. “If financial aid fraud were to continue to increase, I assure you, at a certain point, there will be measures, whether it’s at the state level or the federal level, that are implemented on us.”

This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.