Maybe a quick temporary fix would be to add a reCAPTCHA, and a better fix would be to mandate appearing on campus and verifying your identity before any accounts or financial aid is made available?
But the colleges get "free money," too, for every fake student. So nobody wants to stop it.
> But Rich believes that these colleges do fear enrollment drops if they remove the fake accounts.
> At her college, the institution is considered a medium college — more than 10,000 students but less than 20,000 — but if it loses students, it will be considered a small college — less than 10,000 students — and lose funding down the road, the interim VP of academic affairs recently told instructors and administrators.
We need to change the laws to give any taxpayer standing to sue when they see taxpayer money being misappropriated.
In Australia it not that uncommon for the government to fund legal challenges via grants to it's own laws or to areas of unchallenged law to create rulings. But what you're describing almost seems like you need a anti corruption body that's publicly funded to sue for the best outcome of policy. Giving individuals standing would make it possible but cripplingly expensive to pursue.
I was thinking about Family law court (federal in australia), in cases where it's complex migration and custody matters and some of the scenarios haven't really been seen before but may be considered on paper.
Exactly the same incentives problem with EDD. The more fraud, the larger their budget gets and so there is only one metric they care about; increasing the total number of recipients. Similar issue with fake user counts in the tech world. User count = money.
Unfortunately the dominant party also benefits from all of this fraud, so it is ultimately a political problem. Until there is viable outside political competition, there will continue to be zero accountability and wide scale fraud and corruption. User count = money = political power/voters. Mainstream candidates are owned, and so the only solution involves draining the swamp so to speak and it’s pretty clear at this point, the swamp usually wins.
> We need to change the laws to give any taxpayer standing to sue when they see taxpayer money being misappropriated.
If you did that, then any government aid program would spend all their time and money fending off frivolous lawsuits instead of providing aid to those who need it. Though maybe that’s the intended outcome
I don't mean to insult your intelligence but, "changing the laws to give any..." could be just as easily achieved by we common citizens choosing to fund the IRS.
If you do that you run the risk of lowering your enrolment numbers and losing government funding for your institution. The problem is not tech related it is an incentives problem.
Such is standard operating procedure on any campus where students receive federal funding.
Phantom students are not common at all - anything with a name like "Open the Books" sounds like a lobby group, and one would like about their motives and funding sources.
Whenever the topics of benefits fraud or means testing come up, there’s always a lot of commentary from people who say it’s more important to deliver aid freely and quickly than to ensure that it’s going to the right people.
Yet this is a perfect example of why that doesn’t work in practice. Fraudsters are drawn to systems without sufficient controls and they will exploit them mercilessly as long as they think they can get away with it.
Worse, aid is infinite and resources are limited. These fake students are blocking actual students from registering for classes and draining away the time of educators and administrators who should be busy running the school, not trying to separate out real and fake students.
Means testing is a dumb idea if we’re administering, for example, a $100 drug test before giving someone $100 in food stamps. However, when we’re handing out $5,000 or more then investing $100-$200 into means testing or manual verification should have been an obvious requirement.
EDIT: People seem to be misinterpreting this article. The aid in question came from the COVID-19 related HEERF funds and CARES act and was distributed directly to applicants. It did not count towards nor subtract from normal financial aid (FAFSA, etc.) meant to pay for the education. It was supposed to be money meant to help students survive outside of education in a faltering COVID economy. Financial aid for actual education would have gone straight to the school and therefore there's no reason for fraudsters to register to consume it.
This is money distributed to students (or fraudsters) via direct deposit. It's different than the aid you're familiar with from past college application experience.
It's not that the aid is 'going to the wrong people', it's the fact that financial aid needs to exist in the first place. Setting that aside, I don't really understand how this fraud happens- when I applied for FAFSA, the student loan account was created for me, the assistance applied through some automated system, which was hooked up directly to the college. I never saw the cash at all. The article doesn't explain how the fraud works either.
> It's not that the aid is 'going to the wrong people',
In this case, it literally is going to the wrong people. These funds were designed to give students an extra financial boost during a faltering COVID economy (that didn't really happen) and the funds weren't infinite.
If fraudsters are showing up and claiming the money before actual students in need can get it, I don't understand how you think it's not a case of the aid going to the wrong people.
Again, this isn't tuition aid and it's not related to the cost of college. It was a stimulus/aid package targeted at people who were also students, but it was separate from tuition assistance or tuition financial aid.
> I don't really understand how this fraud happens- when I applied for FAFSA
Lawmakers rushed through a lot of new COVID-19 related aid bills and aid packages. Many of them were poorly thought out and implemented as quickly as possible, forgoing controls and verification to get them done ASAP.
The article specifically mentions COVID-19 related aid, which has been rife with fraud. It’s frustrating that some of these supposedly time-limited emergency aid packages continue to be handed out despite the booming economy and rampant inflation.
Some of the programs are rife with fraud by accident, some (many?) are rife with fraud by design. In my state the contracting system to do things like build roads is rated the most corrupt in the country. Does anyone imagine that's an accident? The PPP gave out "forgivable" loans to small businesses. It was sold as helping businesses that closed down. I know multiple small businesses that never shut down, had their best year ever during the pandemic, and also took home a few hundred thousand dollars extra from the PPP. The general public would consider this fraud, even though technically it's all by the books, broken by design.
Seems like you got it backwards. In this case the fraud is enabled by the means test. If the education was simply free or affordable to anyone and funded from tax revenues, this fraud would not be possible. The highest level of fraud possible in that system would be that someone gets an education they did not truly need, which is hardly bad at all.
Usually done by giving an inflated contract for services of some sort, to an associate. Associate often returns a kickback to the giver.
As a campus needs a large maintanance budget, this can be a big source of fraud.
However, I agree that low-cost state run colleges are a better strategy than free loans.
We should simply make those who support things be personally financially liable for the costs and waste. It’s easy to be flippant about waste when it’s other people’s money you’re wasting.
Willingness to play fast and loose with other people's money in all contexts is a big problem for western society right now. You see it in both public and private sector.
That sounds like a free rider problem: No, I don't "support" the bike paths, so I don't pay for their upkeep, but I live in a better city for their existence, even if I don't even own a bike.
Similarly, I don't "support" the hospitals, right up until I get cancer and spend over a month in-patient receiving some very expensive therapies.
It’s pretty rich for someone to talk of a freeloading problem while advocating for bike lanes that are utilized by only very few, while paid for by everyone else, whether they will ever set foot on the bike path or not.
And I say that as a cyclist, but one that can see past the self-serving rationalization and manipulative nature of the freeloader argument.
And that doesn’t even address the deeply authoritarian and evil core of the argument of “well, I determine what’s best for you so I will force it on you against your will for your own good, because what I want/enjoy conveniently coincides with what is best for you”. It’s tyranny and a purely evil mindset.
What's the incentive for the fraudster in this? The article doesn't really say, but it does link to one example YouTuber who demonstrates this fraud; he says this is a great way to get a free email account. You seem to suggest this is more about $5000+ than an email account; is the financial aid sent to students rather than the bursar's office?
Don't worry Means testing is in full swing today for all government programs.
We are back to making qualifying for aid, welfare, etc. difficult so people who need it give up.
They got lax during Covid, but not today.
The historical point of Means Testing is to dissuade the people whom need it most from applying. Every Social Worker can go on for hours how the powers at be make qualifying for any help arduous.
It's never discussed publically, because outright fraud is easier to report on, and the average Joe has never dealt with the welfare system, except maybe in college.
I had to lie about living independent in order to qualify for anything other than a Pell grant, and a small federal loan. SOL is up, and I paid my later student loans off completely.
Benefits fraud and means testing are two separate concerns. Whether verification is performed is independent of whether the aid is restricted based on one's means. Verification needs to be performed, you're certainly correct about that, that much is clear; but that's a separate issue from means testing.
The amount disbursed fraudulently and the percentage that represents of the total would be a lot more interesting than the number of fake accounts someone observed.
I clicked through to the LA Times article and it mentions at least hundreds of thousands of dollars.
You assume that the SSN is some kind a magic code. The government has long undermined the use of the SSN for accountability or fidelity. It’s essentially a slave/serf/property tracking number, the fact that it is abused by con artists/criminals is wholly immaterial to the rulers. It’s why they don’t care that fraudulent SSNs are being used by illegals too.
You are making assumptions about the motivations of the system being of good faith. There is ample evidence and multiple proofs that such is not the case.
The same applies to the whole education funding scheme, including FAFSA. It’s essentially a money laundering scheme to support the financial enslavement of people through debt in order to participate and be conditioned as an alpha slave that is also locked into the system financially.
There is no incentive to lower the cost of “education”. The incentive is to lock you into having to pay off more and more tokens/currency that you get for doing favors for your masters. The only reason why the rulers are even just toying with the student loan debt forgiveness is because there’s a slave revolt brewing among certain segments of the body of slaves/serfs.
this is an awful interpretation and of course it does not cover the entire situation, however, based on decades of real life interaction, I believe this is partly true.
I’m just curious, how is it you can say that … just totally ignoring the story and the fact that no one claimed anything like what your response would be a valid response to. Its baffling to me when people do that. Can you explain it?
Please read what I wrote again. My theory is that you have some innate and subconscious bias that is so overwhelming that you leap to defense in an illogical and instinctual manner, regardless of anything else, kind of like a body guard may leap into action on a car backfiring. Is that about accurate?
This is a direct response to your obviously wrong explicit statement, that FAFSA has little checks against fraud, and implied that any SSN will get you through.
I linked the document backing up my direct claim to the contrary, that the only way to trick FAFSA is to actually assume another's identity, because the applicants SSN, DoB, and name, must all match.
School's are also liable for any lack of due diligence.
So read what you wrote, then what I wrote, then read the linked document, then read this:
I suspect your immediate reprehension to being outed as ignorant causes you to jump to ad hominem, externalizing your conscious, knowing attitude of being blatantly wrong, and too embarrassed to admit otherwise.
Is that accurate?
Please reply with specific facts and sources to further dismiss or deny any part of my statement, so I can further demonstrate how your ramblings are little more than utterances of an ignorant person, grasping for a conspiracy - where incompetence clearly suffices.
Please provide this, "ample evidence" and, "multiple proofs" that, "this" (what?) is the case. Edgelording about how society hasn't lived up to your expectations as a modern human being (that apparently didn't go to college?) I'm inclined to hear you out but you read like a 22-year-old that spends too much time on 4Chan.
From my memory, Marc Andreessen had a series of somewhat recent tweets criticizing the American university system. However, all of his tweets older than say two months or so appear to be automatically deleted.
Society in general is probably designed to benefit the upper and upper middle class -- that doesn't strike me as a controversial idea. For example, see the following paper:
I would expect that most of us here vaguely qualify as upper middle class. We probably attended competitive schools. Many of us benefited from the largesse of our boomer parents. And even if we're not making FAANG money, and even if we can't quite afford a home suitable for a family in the Bay Area, we probably have make somewhat comfortable incomes, relative to the rest of the population.
Its unfortunate that people like you exist because it sabotages solving problems out of your insecurity of needing to be perceived as “the smartest person in the room”. Your Self trying to reject what I am telling you with cognitive-loops of tropes about me being 22 or being on 4chan, does bot alter the reality that you are quite wrong and as uninformed as your subconscious clearly knows you are.
I am not at all one affected by any of what I said, so your dismissal only serves to further delude yourself and possibly misdirect others who are susceptible to your type of manipulation.
Also, I am not your daddy or teacher, stop trying to waste my time to provide the proofs you will simply dismiss, because you are too lazy to do the work yourself and discovering contradictory truths would require you to face that deep insecurity that drives you. Better keep believing you know best and are the smartest guy in the room.
You sound like a flat earth type, demanding I provide all the proofs you can easily find yourself, just to dismiss them out of hand because they don’t align with your self-image and preconceived notions.
Bullshit takes a magnitude more effort to refute than it does to create.
You made erroneous, ridiculous claims, and - when rightfully challenged - dismissed any doubts as "not my homework,"
Your trolling is demonstrably ineffective, that is why the assumption that you are a 22 year old 4channer has merits - you have the smell of 4chan, but none of the skill, much like the losers that still grace the place now.
If you were better at trolling, you would had been given more credit.
- "Rich said administrators have focused more on ensuring that real students don’t get accidentally dropped from classes."
- "“The school is leaving the fake students in,” she said. “The school is afraid if they admit the fraud, they’re on the hook for allowing the fraud and having to pay it back.”"
It's also possible administrators are the ones putting the fake students in. They're the ones in the easiest position to do this fraud.
It is possible. It is also possible that it was you. Or me. And in this case, equally likely. That is significantly different from the Yale case where someone with purse strings management was committing fraud.
I would say not even, circumstantial evidence already is more. There just isn't enough for a conviction.
It's premature. There has to be a whole process.
That being said, college administrators are masters at dodging the courtroom, and keeping people out of the courtroom. I imagine they have some ideas how to do it for themselves as well.
Maybe going all the way to legally accountable is a bit much but the incentive not to waste other people's money is too damn low these days. You see it in every context and it's so frustrating.
Banks can’t give out fake loans. They try to all the time and are rightfully regulated/fined/charged when they do.
Banks giving out bad loans caused the 2008 collapse. Student loans will one day cause a similar problem but it won’t be big banks going bankrupt, it will be us. Hearing that 20% are obvious fraud doesn’t even surprise anyone. Imagine a bank saying 20% of their loans are fraud but it’s “not their job” to check that loans are given to anonymous recipients who don’t bother to provide even a fake name!
It’s a crime. Like the banks, the people at the top are aware but profit off doing nothing. That they work for the taxpayers just makes it that much more criminal, not less!
Seems like a perfect storm of harmful incentives, no oversight, and weak political leadership. It's a great demonstration of how legislators (and the public) need to remember that policies have to work in the real world with real world constraints and not just on paper.
It's good that some measures are planned to help prevent the fraud, but it's frustrating how slow they are to get implemented.
My local community college woke up their sleepy 15 unit cop squad, and worked with financial aid, in order to prosecute a few people doing it. (A sleepy community college with 15 cops/detectives. There's a state law requiring cops per student ratio regardless of crime which is basically zero. They don't do anything besides ticket cars.)
This is what we pay our police to investigate.
The couple in Marin County signed up for classes, and got federal aid. They told their friends and it was a popular way to make a few grand, but their public outing stopped the scam. They always showed up to the first class though.
Poor people will do sketch chit in order to get ahead. Rich people cheat better, in greater numbers, but don't get caught. (According to professor Cartman. "You know how white people get ahead? They cheat, but they call it, I miss interpreted the ruuules. I'm looking at you Covid business fraudsters, or moral fraudsters.)
notice that Biometric Identification company posting the very first comment in that article comment section. While other YNews readers casually promote constant surveillance, I for one, am steadfastly, actively against biometric tagging for benefits, constant and automated surveillance against the powerless for violations, and no-recourse bureaucracies with guranteed revenue.
Happens all over the place. In developing countries, work as a porter can be lucrative, especially because of the tips travelers give at the end. It's common for the number of porters at the tipping gathering to exceed the number of porters who actually worked the trip. The travelers usually don't have time or focus for learning to identify all of the porters so it's easy to get away with. Those who only show up at the end for a tip are expected to share part of the tip with the porters who kept silent about this.
That reminds me of this scam that this director at a BIG company I used to work at did. He got SSN's of dead people and made fake resume's and interviewed himself and hired them. Then collected their paychecks. Eventually he got caught of course, but big companies are funny how they don't like things like that getting out because it makes them look back and would shake investor confidence etc. So they just let him go, didn't prosecute or even try to get the money back, just swept it under the rug. I heard a year or so later he was at another big company with the same title and job. No idea if he was still doing that but would not surprise me if he continued doing unscrupulous things.
Unfortunately, that type of thing seems to happen a lot in large bureaucracies for those same types of reasons, whether governments, big business or whatever, they want to sweep mistakes like that under the rug. Hopefully they plug the hole before doing that. One can hope.
Work authorization status also affects a number of things related to payroll. So it's not a trivial issue for one person, acting alone, to make up a bunch of fake employees. In order to get away with something like this in real life, there would have to have been someone else at the company in on the fraud (since, as you claim, it's a "BIG" company).
And since payroll is involved, you are looking at several federal and state felonies, which means its not the company's choice to file charges or not. Multiple state and federal agencies would pursue this even if the company did not.
This story would have been believable if you had said it was at a small startup without an HR department.
it was in 1984 and it was a telco.
and there have been other examples of the main point I was making which is that wrong doing gets swept under the rug by bureaucracies to avoid embarrassment.
Just a few years ago a department head was putting through PO's for expensive equipment and approving it himself and then selling it on ebay. He got caught, they fired him but did not press charges. Me moved to another company and as I have seen many times, same title.
I have seen numerous examples of this over the years in both big companies and start ups. it happens.
>The former minister said the numbers may have been inflated by more than six times, and included "desertions [and] martyrs who were never accounted for because some of the commanders would keep their bank cards" and withdraw their salaries, he alleged.
Here in California, I believe I have seen administrators cover up enrollment irregularity (direct fraud?), even before covid-19, in the Hayward Adult School -- English as a Second Language (ESL) program, in the late 1990s and early 2000s. The administrators are cool like lawyers, but now reading this, it all fits.
Wouldn’t surprise me if the schools also get some central planning committee money and therefore are not incentivized and even negatively incentivized to do anything at all about it. They don’t care as long as they get theirs. It’s one of the many cancerous patterns that emerge from any kind of central planning/“communist” type system.
It may have been active "cover up" - but doesn't need to be (or have been). It could be just passively ignoring and not being curious about fraud that benefits you. More (apparent) students benefits the school.
Suppose I'm running a tech company and a bunch of "users" are actually non-engaged, fake accounts. If my valuation is based at least in part on how many users I have, there is not a lot of incentive to go actively looking for, eliminating or preventing these fake accounts. I may even continue to believe that they are all real, engaged users and not even consider the alternative.
Aren't there extra steps required for actually getting the aid dollars where they confirm you are a real person? All this seems to do is get you a .EDU email address (which is useful on its own for getting discounts and such)
"screenshots" of printouts... sounds like a typical academic institutional farce. Sounds like it impacted other states too, but I'm willing to bet certain states reduced the barrier to exploitation to zero and they wonder why it was an attractive target?
California (insert project / program) leads to massive fraud isn't a new headline.
Where's the vendor Xap in this?
Were they not obligated to deliver a application system resistant to obvious forms of fraud and abuse?
I know they're primarily an Education software vendor but this seems especially poor.
XAP is the old system, but I don’t think it’s in use anymore (back then it was just “CCCApply”).
The current system, now called “OpenCCCApply”, was mostly developed by a team from Unicon (https://www.unicon.net/), along with folks within the CCCTechCenter team of my memory /understanding is correct (I’m not sure if it’s managed jointly though, or if only a CCCTechCenter team mostly manages it now though since I never heard those types of details).
A redesign/modernization effort however sounds…expensive.
Can someone please explain in detail how the fraud works? The article doesn't fully explain how the is money distributed to the fraudsters.
With FAFSA, the assistance is all encapsulated away from the student- you apply for an assistance loan (requires SSN), an account is created for you, the college is hooked up directly to that account, so you never actually handle the cash. How does this specific fraud actually work?
One obvious loophole is that there a lot of people (SSNs) who haven’t gone to a college already, so the college can just sign up people and get subsidies without those “students” ever showing up. They can pay these students, or possibly fake their documentation.
COVID brought a rush of emergency aid programs that weren't very well thought out. In this case, the aid targeted at students likely came through the HEERF, or Higher Education Emergency Relief Funds. Some of the programs are listed here: https://www2.ed.gov/about/offices/list/ope/crrsaa.html
The reason these are ripe for fraud is that in many cases they were implemented as direct deposit transfers directly to registered students. They were implemented without checks or controls in order to get the money out ASAP, so anyone who registered as a student and entered the correct information to qualify could get one of those direct deposits.
As far as I can tell, some of the implementation details depended on the college. Scammers likely tried different colleges until they discovered a system that didn't verify anything (California Junior College System) and then started filling out forms to collect the direct deposits.
The fact that scammers are registering with obviously fake names like "Barack Obama" suggests that zero confirmations are being performed at all before this money is distributed.
That doesn't strike me as fake. I've met Osama Bin Laden, at least one of the many people in this world with that name. There are no doubt many people called Gene Simmons who might have issues setting up accounts. James Bond was named after an author of bird books. I bet his descendants still get laughs at school. I met a junior officer once, last name "Planet". Good luck keeping a straight face on parade as they get promoted to Captain.
I had a coworker who was taking a cab back to the office. The cabbie asked for the address: 123 Main St. He thought it was fake, but not quite 123 Fake St fake.
From the article, the fake names are not even remotely plausible: whole batches of students with "NA" as middle initial, sequential registration numbers, long compound words, and other obvious fakery.
This is another example of why aid programs should be universal. Send every citizen a cheque for the same amount, and I mean everyone (even Bezos and Musk). One system built competently. Way lower risk of fraud or corruption (qualifiers exacerbate fraud, gatekeepers policing qualifiers create corruption).
Look, I’m all down for a wealth tax but under our current system this doesn’t count for anything. If my house doubles in value from $200k to $400k I didn’t make $200k in income in the eyes of the tax man.
The fact that the criteria for the payout was just income and not a combination of income and assets is the fault of the people writing the legislation.
Our efforts to avoid accidentally helping a rich person via means testing cause for more damage to our ability to help poor and middle class people.
Just give everybody the same amount of cash and leave it at that! There are few enough rich people (almost by definition) that it won't save much to exclude them.
I feel like the public, even in may 2022, just can’t grasp the basic concept of inflation. A better way than dropping cash out of helicopters, or mailing checks, is to give people tax money back in the form of a standard deduction. It’s almost like people have thought about this stuff already.
Any way that you give people more money without also increasing the supply of stuff to buy will generate inflation for those things that those people want to buy. If you target the money to certain people, then the things those people buy will inflate. If you target the money to certain stuff (like education), then that is what will inflate. I don't think changing the mechanism to a standard deduction changes this - except maybe to focus the inflation on taxpayers and what they buy.
This doesn't well thought out either. What if you need to send larger amounts of money? Sending out money to everyone works when it's a reasonably small amount.
Typically you get a small amount, somewhere in the order of $500 per term, refunded directly to you for personal expenses, textbooks, etc. I think certain students may qualify for more.
> Then there's the fraud where the College gets benefits from student numbers so allows the spam.
This is how one section of the Danish educational system worked for years: Pointless, governmentally funded study programmes that don’t qualify for any kind of real-world work, but the school gets a yearly reward per student, and the students get a monthly deposit for being a student.
These covid programs were certainly a massive handout to the unscrupulous. I feel sorry for those who worked hard and lived frugally, just to get steamrolled by the government money printer.
And look how reluctant the Fed and Fiscal were to reign in any of the madness. 0 moves until 8% CPI. Can't have housing appreciate at 10% instead of 20%, or stocks at 10 instead of 30 now, can we?
Never seen a class of people so eager to take wealth/future prosperity from their children
2008 bailout didn't even come close to the size of the Covid one. And there were far fewer "helicopter" dollars, no eviction moratorium, foreclosure moratorium, student debt forbearance. And the economy was much worse back then, with many high profile bankruptcies and slow gains in employment
The initial Covid packages were warranted, but the packages passed in December 2020 and March 2021 were largely unnecessary after the initial shock had passed and the velocity in the drop in unemployment was already strong. Or they may have been warranted at a much smaller magnitude with more discretion in who received benefits.
The consequence now is that the economy is so overstimulated, we basically have to force the recession we would have had anyway to prevent it from overheating. So we'll end up in the same place, but with a ton of extra debt to service
I'm all for the student loan bailout, at least this one is going directly to the pockets of consumers instead of having to trickle down like the PPP loans or previous corporate bailouts.
Student loan holders already received 2 years of paused payments and an effective 20%+ reduction in debt due to inflation over that period.
There is a lot wrong with our education system (including guaranteed infinite loans incentivizing high tuition prices -- a better system would be to just have some state schools be free, and like in Europe, more competitive. They would only be for people who really need them financially and have great potential academically). However, resetting student loans and letting the system continue is definitely NOT the solution.
So why not both? Reset loans and don't let the current system continue? Your argument is a weird one. It literally hurts no one to forgive the loans but a lot of people don't want to see and i think that's because those people who don't have student loans feel like they're losing an advantage.
Because no one is talking about doing both -- the only policy being discussed by populists is the simplistic option (cancel loans or don't cancel loans). Also, all of those loans (and I have a fair amount as well) were taken voluntarily by adults capable of handling responsibility and consequences. If there was any fair way to do it, it would be to reimburse the last X years worth of student loan payments, such that people who forewent savings to pay down their debts aren't penalized compared to people who did not.
> It literally hurts no one to forgive the loans
Also want to address this, because I feel like it's a common misconception, especially with Gen Z. It's basically an inflationary policy to forgive debts. So it does hurt anyone who is affected negatively by inflation, while certainly not being "fair" for the reason mentioned above (some responsible adults actually paid their debts and are penalized for that). We all make mistakes (such as taking out massive loans to go to acting school and having it not materialize), but consequences are the side effect of living in a consistent reality. If you make financial reality inconsistent by forgiving loans, you incentivize more of that bad behavior. Also note that most degree holders with student debt are not the lower class, but the middle and upper middle class. Student loan forgiveness is a handout for an educated class of people who are generally doing much better than the poorest in society.
Should taxpayers who never went to college and didn't take out any student loans have to bear the financial burden? Should borrowers who did the responsible thing and paid back their loans already receive a retroactive refund?
I don’t think a 100% bailout is under discussion; the most likely scenario is $10K relief which will zero the balances of 30% of student debt holders and cost $37B.
Since most of that 30% have low income and come from low income backgrounds it will be a struggle to get it passed. A shame as those are the ones that need it the most. It’s interesting to note that Social Security was designed to cover 100% of the population even though only a smaller segment needed it, specifically to make it harder to kill. For student debt that would be an impossible sum and unnecessary.
You hit the nail on the head when you mentioned Social Security-- that's where the rescue efforts need to be concentrated.
Student debt problems are entirely self-inflicted. Students taking the loans made their own decisions. Social Security users have been paying for decades (not taking, as the student loan recipients were). Social Security users, especially those who have not yet started collecting, have worked decades to get their benefits back.
If students get their loans paid off before Social Security is fixed, it's a certain sign of corruption. (Votes for money.)
Use your votes to make government effective. Vote for politicians that pledge to fix Social Security.
Agreed there will be a Social Security payment. But it will be reduced from today's levels.
Remember, older folks don't have time to remain in the labor force (unlike younger people, who will benefit from rising paychecks.) At the end of the spectrum, there is only what has been saved (which is reduced by inflation) and pensions, Social Security.
> It’s interesting to note that Social Security was designed to cover 100% of the population even though only a smaller segment needed it, specifically to make it harder to kill.
> Job categories that were not covered by the act included workers in agricultural labor, domestic service, government employees, and many teachers, nurses, hospital employees, librarians, and social workers. As a result,
> > 65 percent of the African American workforce was excluded from the initial Social Security program (as well as 27 percent of white workers). Many of these workers were covered only later on, when Social Security was expanded in 1950 and then in 1954.
Every time the government gets involved markets get distorted and we pay the price down the road. Guaranteed home loans from the govt with almost no down payment caused lenders to not check credit and then we had 2008. Very similar situation with government education loan guarantees. And then legislators pretend to fix the problem with bailouts but we all pay with an inflation tax. Its robbery from savers to what should be risky borrowers. On top of that we now have these bloated education institutions that offer bs degrees and wacky educators because of the artificial propped up market that is detached from economics and value.
This is true and shouldn't be downvoted. Only quibble is the alarmist tone,
however the situation is and should be somewhat alarming. Folks often recommend putting
out the fire with gasoline, unfortunately.
For example another poster recommends free or low-price state schools, instead
of handing out mountains of freshly created money. One of those is incredibly
inflationary, the other is not.
Every policy in the last fifty years of the US government would be perfectly rational if its purpose was to destroy the nuclear and extended family. It may just be coincidence, but there's no doubt these are the consequences.
These policies are in line with that, a unequivocal transfer of money from structured hard working families to unstructured broken ones. Removing incentives for the former and adding them for the latter.
It's very easy to destroy social fabric top down, but it can only be created bottom up.
That is how benefits work. It is called imcome redistribution and the people doing it are proud of it. They also like to pretend it helps the poor and disenfranchised.
All it does is encourage freeloading and cheating, as well as disincentivising success.
This is the low effort response every time. Where is the nuance in the thinking around magnitude and implementation of policy?
It's not a black/white situation of choosing between economic collapse or hyperinflation at all. And keep in mind there were 3-4 huge packages passed. It's not like this had to be done as a single rushed magnum opus bill, this is the consequence of many bills and executive actions passed over 2 years, coinciding with a Fed that had unilateral power to ease the brakes yet did nothing for 2 years.
Well I mean our political climate is why it had to be passed in a huge bill. When every bill of any importance is passed with narrow margins and political capital is finite you’re incentivized to have “big pushes” because you likely wont get another shot.
I'm not really that familiar with legislative processes, but this seems ridiculous if it's true. Isn't it the job of the house to write bills? What else do they have to do? Why won't they get another shot?
I think it's just a lack of political will. Not from regular people, but from politicians. People love to point to a huge 1000+ page bill that didn't pass because the guys voted it down and say "oh well we can't have X because the other guys voted against it". If "your guys" are really interested in having X, why don't they just write another bill that contains the minimum language to enact it?
We should really reject these massive "omnibus" bills out of principle. No one even reads them! There's no reason we can't have simple, targeted legislation that is limited to exactly one topic.
Regardless of my opinion on Covid bailouts (too big, too small, too many, too few) all such interventions are squeezing a balloon: you shift the problem temporally.
There’s nothing wrong with doing that (people sensibly borrow to purchase and use assets all the time). And when people are in the middle of a crisis it’s appropriate to take action (even in a drought the fire brigade sprays water on a fire).
But it’s worth looking retrospectively to figure out how much to do next time, not to be absolutist about it one way or the other.
Perhaps its because I work on the backend side of businesses (specifically the tax part) and so I actually get to see the financial numbers, but I am aware of over ten thousand jobs in SoCal alone that were saved by the PPP bailout.
It's disturbing to see the vaguely sociopath comments on this thread by tech workers who were largely unaffected by COVID complaining about "interfering" with the markets and about "bailouts."
A lot of businesses were hit hard by COVID. For tens of thousands of businesses, the COVID PPP loans were the only source of revenue they had at a time when government restrictions (i.e., the lockdowns) were inhibiting their sources of revenue. (And guys, we were in a pandemic that killed millions worldwide. Even after the lockdowns ended, many people were scared to go out for months.)
And even with the PPP loans, many small businesses didn't survive the lockdowns. Margins are low in many industries. Not everything is tech where you can bumble along without profits or purpose for a decade surviving on fat VC money.
thank you for taking the time to add this -- in the first six months of covid-19, there were some US gov'ies that took the small business story very seriously, and conducted direct, public surveys and published those numbers. The trends now, two years later, are still hidden from even intelligent people here at YNews, since the mainstream news won't print stories that refer to it, for fear of causing panics(?); and that ridiculous, cynical number called unemployment just floats along in the news every day.
I have done some initial quantitative analysis on the raw survey responses, but not gone further, since you know, daily troubles. The small business situation is deeply changed in the last two years, and this is not over at all.
If you had bothered to follow up on that, you would have learned that all of these Bachelor(ette) contestants employed other people and used the PPP loans to pay those salaries during the PPP period when their normal revenue streams were unavailable due to COVID restrictions (Tayisha Adams actually went into detail about how and why she used the loan in the linked article). Which was quite literally the point of the PPP loans.
But I get that critical thinking is hard when you have an ideological point to make and you just want to shit talk other people.
Yes, proof of impaired revenue or profit streams with a certain threshold should have been a requirement for PPP.
Much lower income thresholds should have been applied to stimulus checks. Student loan debt should not have been paused for high earners. Interest rates should not have been pegged at 0 while asset bubbles formed over all asset classes.
That's called rational and responsible policy.
Enforcement could have been retroactive to avoid delaying disbursement of funds. It's not hard to write sensible legislation, even under a time crunch.
And hardships come naturally to business all the time. It's not the government's role to save everybody in every situation. Companies that were financially irresponsible or poorly run should naturally fail when economic times get rough.
The road to hell is paved with good intentions. We saved everybody just to end up with massive inflation which will require forcing the economy into recession anyway, defeating the entire purpose and impact of the stimulus.
Make no mistake, unemployment will spike in a big way as the Fed tightens, just as it has essentially every other time they had to tighten to curb inflation.
The aid was right, the magnitude was far overdone. It will be quite obvious to historians, though it's obvious even now.
Wow. Just wow. No point in trying to have a conversation with someone who is just going to rotely reiterate ideological talking points.
But I will say on one point (Companies that were financially irresponsible or poorly run should naturally fail when economic times get rough.) These companies ere struggling because the government shut everything nonessential down. The point of the PPP was to make up for that fact that the government, during a global pandemic that killed millions wouldn't let people go to work.
Next time you want to discuss the merits of the PPP, step outside of your tech bubble and think about what COVID was like for all of the non-tech companies whose functions can't be done from home.
What is ideological? Your responses indicates you have no understanding of nuance or magnitude in policy.
Was it an all or nothing situation? No, not at all. So either you're being intentionally misleading, or lack critical thinking. The option in front of politicians wasn't do these bills in this exact form or nothing at all. Why act like it was? It's a false premise.
Is it due to a bias in trying to justify the inflationary result?
And you seem to lack understanding of the consequence of high inflation, which inevitably will be higher unemployment, hurting those you sought to help. Study any history of the relationship between monetary policy, inflation, and unemployment and it's pretty obvious.
LOLOLOL. I worked on economics policy in a prior life. I've forgotten more about economic policy than you've ever known.
Inflation is not a bad thing; in fact, low-to-moderate inflation is desired. High inflation is not because it generally means that base or fixed cost growth (i.e., food and oil) is outpacing productive growth (pretty much everything else).
The option in front of politicians wasn't do these bills in this exact form or nothing at all. Why act like it was? It's a false premise.
No it wasn't, but it was the best package they could put together, and it took months to get that far due to ideologues blocking better/more efficient options.
It's for armchair economists like you to debate the theoretical perfect relief package that they should have passed, in the non-existent fantasy la la land where that would have been possible. Of course, in that fantasy land, COVID wouldn't have happened, and our economy would not have become dependent on JIT inventory.
While I wouldn’t say that the policy as implemented was optimal, I think it’s worth considering the conditions under which it was made.
Each policy like this needs to balance the efficiency of the program with its coverage of those who need help. As an example, giving money to everyone unconditionally would have ensured full coverage, but it might not be very efficient. However, each restriction added to make the aid more targeted risks excluding people who genuinely needed help (reducing coverage) and _also_ increases costs since now the restriction needs to be tested, there needs to be an enforcement apparatus for those who violate it, etc. This is an uncertain calculus.
Then there’s the political reality that policy is not created by a benevolent dictator but instead through compromise among many individual parties, each of which has their own agenda and priorities, some of whom are acting in bad faith. Each decision point leads to more debate (should this group be in or out? should this threshold be X or Y?) and hassle, while in the background there are people suffering right now. After some point, you have to give up and accept the imperfections just to get it done.
Finally, politics being what they are, no matter how effective, helpful, and efficient the program is, the government’s reward for shipping the aid package is that the opposition party will decry it as wasteful and unnecessary. Every flaw will be amplified as part of their overall political messaging, and armchair analysts with the full benefit of hindsight will critique every decision. I can’t imagine that provides great motivation to put a lot of effort into polishing and tweaking the policy into perfection.
All of this is not to say that we shouldn’t strive for better programs and government—we absolutely should—just that it is a tremendously difficult problem.
This is such an easy problem to solve. There are simple technical tools to prevent bots from enrolling. More advanced detection methods will catch basically all of the rest. And then you can and should be contacting prospective students via phone or otherwise to verify enrollment. And require physical presence and ID (as my university did) before distributing aid.
Just an example of truly inept leadership in multiple departments and at the top.
It’s interesting to see this thread crop up here, as I’ve only recently left CCC system for a job in tech after being in IT within the system for about 14 years.
This particular issue over the last year or so has gotten worse, with more eyeballs on it, once actual money became involved (before it was still an issue but on a smaller scale mostly for the free edu emails we tend to issue, along with other freebies that can help enable, such as free credits for Azure or other services).
Even in the previous cases, I was annoyed/upset because in my mind the first line of defense the colleges have is preventing these fake users from being able to submit an application successfully in the first place, since the OpenCCCApply application (which I believe is used by all ~115 CCCs) was allowing the submissions in the first place…and since we mostly bring that application data into the individual colleges, not many triggered a “hold” on our end.
Yes, CCCTechCenter (which helps manage the team which maintains the OpenCCCApply system) have done a few things over this past year that are mentioned in the article already (but based on the article I can’t tell 100% if it is really indicating the issue is still rampant in the more recent semesters…one of the changes was adding usage of an IP reputation checker in for example, but there are likely ways around that too for these folks who actually don’t seem to actually use bots…maybe they use actual people instead based on what I’ve seen, such as the YouTube video shared in the article).
What I found really annoying by it all is that while the problem originated from the systems being provided to the colleges from the state level (OpenCCCApply mainly), the individual colleges are now on the hook to gather a bunch of mostly useless data, and go on silly adventures such as investigating IP address info within our other systems (like Canvas) to help find or report the fraudulent activity.
I think I saw FAFSA mentioned a few times but I don’t think there is a ton of fraud coming from the FAFSA application too directly…but in this past year many of the colleges have been putting COVID relief funds they’ve received (to help get students/staff back on campus) and using those to pay for fees or provide an extra amount for books, etc. which isn’t something that will continue forever (in fact, I think for this summer this will already have ended, or it will be the last semester where it will be offered).
In most cases, once the incentive is taken away, or the bar to get it is made higher, these folks creating the fraudulent accounts will generally move on (or target schools that don’t implement some of the 2nd layer fixes at the college level…unfortunately while the CCCTechCenter tries its best, it doesn’t typically fully acknowledge its role in creating some of these situations, and I almost lol’ed when I saw towards the end of the article I saw they are looking to get more funding to “modernize” it, yet again, considering a lot of effort / time / money already has gone into creating the current OpenCCCApply system not that long ago from the previous system, which was pretty bad in comparison).
Overall though this particular situation is at the same both more complex and simpler than folks may think, once you have some more details (more complex because there is a lot about what’s going on in the CCCs the HN community isn’t aware of, along with super strict regulations that have to be followed within the individual Financial Aid departments at each school, otherwise they win not be able to provide federal aid monies to students if they weren’t doing so, making that avenue for fraud a lot more less likely than the scenario I shared above on how the COVID relief monies have been being used instead to provide an incentive to get students back in the classroom…along with the solution being simpler since we already have a central application process that should be the system that keeps these applications from ever reach...
Another note…based on what I know, most colleges are suffering from low enrollment too, and even though funding isn’t solely based on the the student count on census date anymore (which is usually about 1-2 weeks into a semester…and faculty is supposed to drop students that don’t come on the first day of class typically)…since now the formula is more complex with “success” related factors added (numbers of degrees / certificates awarded plus some other ones I don’t directly recall right now.
This leads to number of students still being a pretty big factor in the funding received for the year. From Administrators I would say if any are worth their salt, ignoring any sort of fraud would be a no-no so I’m hoping that’s not a common situation being observed. On the other hand, losing a substantial percentage of your current budget due to a loss of students can be pretty tragic for the staff working on the campus. Budget reserves can usually be dipped into for a period of time, but what most folks don’t know or realize is that compared to private businesses where the cost of employees may be only a fraction of what the business brings in profit, most CCCs are likely spending 80-90% of their budgets on salaries and benefits for their staff (in some cases the % may be more, in some cases it may be less). This makes it extremely difficult most of the time to weather a big loss in students because if budget reserves get expended, and student numbers don’t improve, that’ll mean some sort of layoff process…which also provides those employees with reinstatement rights too for a considerable period of time afterward).
In Sweden any financial aid to students are revoked if you dont get a grade. If you apply a second time, after failing classes you simply dont get aid until your grades improve. Aid is only paid out a month at a time.
Also, you have to apply using digital-ID (BankID) for both classes and aid, theres no way to cheat. This way, fraud is unheard of.
Educational aid, if paid out erroneously is collected more aggressively than taxes.
In America, the vast majority of financial aid to students is revoked if they fail their classes. Not sure how often aid is given out, but 1 month vs 4 isn’t a big difference.
I haven’t heard much of any America specific big time fraud in this area either. If any implication was this article. That doesn’t count since the article isn’t saying aid is happening unlike Sweden.
There are no reasons for the college to identify fake students, or event prevent it in the future. higher (apparent) enrollment justifies larger budgets and funding. And it's not their money being given away.
Federal aid requires attendance verification for each course a student takes. In my state, state-level aid adopted the same requirement. Why the heck does the California system do this too?
Not to mention that even getting the aid in the first place requires filling out a FAFSA form-- difficult to provide fake tax returns-- and about 10% are randomly selected for verification as well.
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[ 5.1 ms ] story [ 201 ms ] thread> But Rich believes that these colleges do fear enrollment drops if they remove the fake accounts.
> At her college, the institution is considered a medium college — more than 10,000 students but less than 20,000 — but if it loses students, it will be considered a small college — less than 10,000 students — and lose funding down the road, the interim VP of academic affairs recently told instructors and administrators.
We need to change the laws to give any taxpayer standing to sue when they see taxpayer money being misappropriated.
Unfortunately the dominant party also benefits from all of this fraud, so it is ultimately a political problem. Until there is viable outside political competition, there will continue to be zero accountability and wide scale fraud and corruption. User count = money = political power/voters. Mainstream candidates are owned, and so the only solution involves draining the swamp so to speak and it’s pretty clear at this point, the swamp usually wins.
If you did that, then any government aid program would spend all their time and money fending off frivolous lawsuits instead of providing aid to those who need it. Though maybe that’s the intended outcome
Is it perfectly effective? No, but it stops a massive chunk of otherwise easy-to-execute fraud.
Phantom students are not common at all - anything with a name like "Open the Books" sounds like a lobby group, and one would like about their motives and funding sources.
Yet this is a perfect example of why that doesn’t work in practice. Fraudsters are drawn to systems without sufficient controls and they will exploit them mercilessly as long as they think they can get away with it.
Worse, aid is infinite and resources are limited. These fake students are blocking actual students from registering for classes and draining away the time of educators and administrators who should be busy running the school, not trying to separate out real and fake students.
Means testing is a dumb idea if we’re administering, for example, a $100 drug test before giving someone $100 in food stamps. However, when we’re handing out $5,000 or more then investing $100-$200 into means testing or manual verification should have been an obvious requirement.
EDIT: People seem to be misinterpreting this article. The aid in question came from the COVID-19 related HEERF funds and CARES act and was distributed directly to applicants. It did not count towards nor subtract from normal financial aid (FAFSA, etc.) meant to pay for the education. It was supposed to be money meant to help students survive outside of education in a faltering COVID economy. Financial aid for actual education would have gone straight to the school and therefore there's no reason for fraudsters to register to consume it.
This is money distributed to students (or fraudsters) via direct deposit. It's different than the aid you're familiar with from past college application experience.
In this case, it literally is going to the wrong people. These funds were designed to give students an extra financial boost during a faltering COVID economy (that didn't really happen) and the funds weren't infinite.
If fraudsters are showing up and claiming the money before actual students in need can get it, I don't understand how you think it's not a case of the aid going to the wrong people.
Again, this isn't tuition aid and it's not related to the cost of college. It was a stimulus/aid package targeted at people who were also students, but it was separate from tuition assistance or tuition financial aid.
> I don't really understand how this fraud happens- when I applied for FAFSA
Lawmakers rushed through a lot of new COVID-19 related aid bills and aid packages. Many of them were poorly thought out and implemented as quickly as possible, forgoing controls and verification to get them done ASAP.
The article specifically mentions COVID-19 related aid, which has been rife with fraud. It’s frustrating that some of these supposedly time-limited emergency aid packages continue to be handed out despite the booming economy and rampant inflation.
I can’t believe it was a mistake, especially when you have government bureaucrats who are doing the scam themselves for millions…
https://globalnews.ca/news/7600626/ontario-civil-servant-bet...
However, I agree that low-cost state run colleges are a better strategy than free loans.
Similarly, I don't "support" the hospitals, right up until I get cancer and spend over a month in-patient receiving some very expensive therapies.
And I say that as a cyclist, but one that can see past the self-serving rationalization and manipulative nature of the freeloader argument.
And that doesn’t even address the deeply authoritarian and evil core of the argument of “well, I determine what’s best for you so I will force it on you against your will for your own good, because what I want/enjoy conveniently coincides with what is best for you”. It’s tyranny and a purely evil mindset.
> The aid in question came from the COVID-19 related HEERF funds and CARES act and was distributed directly to applicants.
We are back to making qualifying for aid, welfare, etc. difficult so people who need it give up.
They got lax during Covid, but not today.
The historical point of Means Testing is to dissuade the people whom need it most from applying. Every Social Worker can go on for hours how the powers at be make qualifying for any help arduous.
It's never discussed publically, because outright fraud is easier to report on, and the average Joe has never dealt with the welfare system, except maybe in college.
I had to lie about living independent in order to qualify for anything other than a Pell grant, and a small federal loan. SOL is up, and I paid my later student loans off completely.
I clicked through to the LA Times article and it mentions at least hundreds of thousands of dollars.
You are making assumptions about the motivations of the system being of good faith. There is ample evidence and multiple proofs that such is not the case.
The same applies to the whole education funding scheme, including FAFSA. It’s essentially a money laundering scheme to support the financial enslavement of people through debt in order to participate and be conditioned as an alpha slave that is also locked into the system financially.
There is no incentive to lower the cost of “education”. The incentive is to lock you into having to pay off more and more tokens/currency that you get for doing favors for your masters. The only reason why the rulers are even just toying with the student loan debt forgiveness is because there’s a slave revolt brewing among certain segments of the body of slaves/serfs.
There is little room for fraud outside of blatant identity theft.
Please read what I wrote again. My theory is that you have some innate and subconscious bias that is so overwhelming that you leap to defense in an illogical and instinctual manner, regardless of anything else, kind of like a body guard may leap into action on a car backfiring. Is that about accurate?
This is a direct response to your obviously wrong explicit statement, that FAFSA has little checks against fraud, and implied that any SSN will get you through.
I linked the document backing up my direct claim to the contrary, that the only way to trick FAFSA is to actually assume another's identity, because the applicants SSN, DoB, and name, must all match.
School's are also liable for any lack of due diligence.
So read what you wrote, then what I wrote, then read the linked document, then read this:
I suspect your immediate reprehension to being outed as ignorant causes you to jump to ad hominem, externalizing your conscious, knowing attitude of being blatantly wrong, and too embarrassed to admit otherwise.
Is that accurate?
Please reply with specific facts and sources to further dismiss or deny any part of my statement, so I can further demonstrate how your ramblings are little more than utterances of an ignorant person, grasping for a conspiracy - where incompetence clearly suffices.
:)
Society in general is probably designed to benefit the upper and upper middle class -- that doesn't strike me as a controversial idea. For example, see the following paper:
Class in the 21st century: Asset inflation and the new logic of inequality https://journals.sagepub.com/doi/full/10.1177/0308518X198736...
And here's a tweet from Andreessen on how the college system benefits the upper middle class: https://twitter.com/pmarca/status/1513553688060596225 (https://twitter.com/Mark_J_Perry/status/1513519643876540421)
I would expect that most of us here vaguely qualify as upper middle class. We probably attended competitive schools. Many of us benefited from the largesse of our boomer parents. And even if we're not making FAANG money, and even if we can't quite afford a home suitable for a family in the Bay Area, we probably have make somewhat comfortable incomes, relative to the rest of the population.
I am not at all one affected by any of what I said, so your dismissal only serves to further delude yourself and possibly misdirect others who are susceptible to your type of manipulation.
Also, I am not your daddy or teacher, stop trying to waste my time to provide the proofs you will simply dismiss, because you are too lazy to do the work yourself and discovering contradictory truths would require you to face that deep insecurity that drives you. Better keep believing you know best and are the smartest guy in the room.
You sound like a flat earth type, demanding I provide all the proofs you can easily find yourself, just to dismiss them out of hand because they don’t align with your self-image and preconceived notions.
I know. Its a strong mental cage you are in.
You made erroneous, ridiculous claims, and - when rightfully challenged - dismissed any doubts as "not my homework,"
Your trolling is demonstrably ineffective, that is why the assumption that you are a 22 year old 4channer has merits - you have the smell of 4chan, but none of the skill, much like the losers that still grace the place now.
If you were better at trolling, you would had been given more credit.
- "“The school is leaving the fake students in,” she said. “The school is afraid if they admit the fraud, they’re on the hook for allowing the fraud and having to pay it back.”"
It's also possible administrators are the ones putting the fake students in. They're the ones in the easiest position to do this fraud.
Like in the Yale story from last month:
https://news.ycombinator.com/item?id=30849862
It's premature. There has to be a whole process.
That being said, college administrators are masters at dodging the courtroom, and keeping people out of the courtroom. I imagine they have some ideas how to do it for themselves as well.
Make them legally accountable.
Banks can’t assist fraudsters and then say “not my job.” The administrators should be jailed or lending to colleges with this problem should stop.
Banks can’t give out fake loans. They try to all the time and are rightfully regulated/fined/charged when they do.
Banks giving out bad loans caused the 2008 collapse. Student loans will one day cause a similar problem but it won’t be big banks going bankrupt, it will be us. Hearing that 20% are obvious fraud doesn’t even surprise anyone. Imagine a bank saying 20% of their loans are fraud but it’s “not their job” to check that loans are given to anonymous recipients who don’t bother to provide even a fake name!
It’s a crime. Like the banks, the people at the top are aware but profit off doing nothing. That they work for the taxpayers just makes it that much more criminal, not less!
It's good that some measures are planned to help prevent the fraud, but it's frustrating how slow they are to get implemented.
My local community college woke up their sleepy 15 unit cop squad, and worked with financial aid, in order to prosecute a few people doing it. (A sleepy community college with 15 cops/detectives. There's a state law requiring cops per student ratio regardless of crime which is basically zero. They don't do anything besides ticket cars.)
This is what we pay our police to investigate.
The couple in Marin County signed up for classes, and got federal aid. They told their friends and it was a popular way to make a few grand, but their public outing stopped the scam. They always showed up to the first class though.
Poor people will do sketch chit in order to get ahead. Rich people cheat better, in greater numbers, but don't get caught. (According to professor Cartman. "You know how white people get ahead? They cheat, but they call it, I miss interpreted the ruuules. I'm looking at you Covid business fraudsters, or moral fraudsters.)
Or a more recent example, Afghanistan: https://www.bbc.com/news/world-asia-59230564
Unfortunately, that type of thing seems to happen a lot in large bureaucracies for those same types of reasons, whether governments, big business or whatever, they want to sweep mistakes like that under the rug. Hopefully they plug the hole before doing that. One can hope.
Work authorization status also affects a number of things related to payroll. So it's not a trivial issue for one person, acting alone, to make up a bunch of fake employees. In order to get away with something like this in real life, there would have to have been someone else at the company in on the fraud (since, as you claim, it's a "BIG" company).
And since payroll is involved, you are looking at several federal and state felonies, which means its not the company's choice to file charges or not. Multiple state and federal agencies would pursue this even if the company did not.
This story would have been believable if you had said it was at a small startup without an HR department.
I have seen numerous examples of this over the years in both big companies and start ups. it happens.
wtf
Suppose I'm running a tech company and a bunch of "users" are actually non-engaged, fake accounts. If my valuation is based at least in part on how many users I have, there is not a lot of incentive to go actively looking for, eliminating or preventing these fake accounts. I may even continue to believe that they are all real, engaged users and not even consider the alternative.
reaping and sowing springs to mind
Where's the vendor Xap in this?
Were they not obligated to deliver a application system resistant to obvious forms of fraud and abuse? I know they're primarily an Education software vendor but this seems especially poor.
The current system, now called “OpenCCCApply”, was mostly developed by a team from Unicon (https://www.unicon.net/), along with folks within the CCCTechCenter team of my memory /understanding is correct (I’m not sure if it’s managed jointly though, or if only a CCCTechCenter team mostly manages it now though since I never heard those types of details).
A redesign/modernization effort however sounds…expensive.
With FAFSA, the assistance is all encapsulated away from the student- you apply for an assistance loan (requires SSN), an account is created for you, the college is hooked up directly to that account, so you never actually handle the cash. How does this specific fraud actually work?
The reason these are ripe for fraud is that in many cases they were implemented as direct deposit transfers directly to registered students. They were implemented without checks or controls in order to get the money out ASAP, so anyone who registered as a student and entered the correct information to qualify could get one of those direct deposits.
As far as I can tell, some of the implementation details depended on the college. Scammers likely tried different colleges until they discovered a system that didn't verify anything (California Junior College System) and then started filling out forms to collect the direct deposits.
The fact that scammers are registering with obviously fake names like "Barack Obama" suggests that zero confirmations are being performed at all before this money is distributed.
Thanks for providing the additional details.
That doesn't strike me as fake. I've met Osama Bin Laden, at least one of the many people in this world with that name. There are no doubt many people called Gene Simmons who might have issues setting up accounts. James Bond was named after an author of bird books. I bet his descendants still get laughs at school. I met a junior officer once, last name "Planet". Good luck keeping a straight face on parade as they get promoted to Captain.
It’s not like Bezos will cash this cheque.
Of course he won't be doing anything so mundane personally, people like him will have teams whose job it is to squeeze every cent.
He actually was entitled to it. His earnings in 2011 were below $100,000. I'm all for keeping people honest, but let's not lie.
See, in 2010 he was worth $12.6 billion. In 2011 it was $18.1 billion. Then in 2012 went up to $23.2 billion. These figures apparently come from Forbes, who calculate this stuff.. see https://www.therichest.com/lifestyles/jeff-bezo-years-earned...
I guess he didn't "earn" that money though.. so would definitely have been entitled to a benefit for folk who don't earn so much? My bad...
The fact that the criteria for the payout was just income and not a combination of income and assets is the fault of the people writing the legislation.
Our efforts to avoid accidentally helping a rich person via means testing cause for more damage to our ability to help poor and middle class people.
Just give everybody the same amount of cash and leave it at that! There are few enough rich people (almost by definition) that it won't save much to exclude them.
Mostly it's people getting free .edu email address which allows discounts on software and other things. This is most of the 65K fake students.
Then there's the fraud, where students are paying people $ to take their classes to get the government $$$$ -
"However, Rich soon realized that all of the work being submitted by four students was clearly being completed by an individual who wasn’t a student in the class." https://www.theepochtimes.com/mkt_breakingnews/california-co...
This might be why middle names are missing. That data is unknown but the other data real.
I suspect they are wrong about the third type of external fraud, but not sure.
Then there's the fraud where the College gets benefits from student numbers so allows the spam.
This is how one section of the Danish educational system worked for years: Pointless, governmentally funded study programmes that don’t qualify for any kind of real-world work, but the school gets a yearly reward per student, and the students get a monthly deposit for being a student.
At least I remember needing that info to register for university in another state.
https://pagesix.com/2021/06/28/tayshia-adams-and-more-bachel...
These covid programs were certainly a massive handout to the unscrupulous. I feel sorry for those who worked hard and lived frugally, just to get steamrolled by the government money printer.
And look how reluctant the Fed and Fiscal were to reign in any of the madness. 0 moves until 8% CPI. Can't have housing appreciate at 10% instead of 20%, or stocks at 10 instead of 30 now, can we?
Never seen a class of people so eager to take wealth/future prosperity from their children
But now that inflation is here and consumer sentiment is close to all time lows, the jig is up.
Agreed. Very Ugolino.
https://www.investopedia.com/articles/economics/08/governmen...
The next one looks like student loans which totals $1.61T nation wide.
The initial Covid packages were warranted, but the packages passed in December 2020 and March 2021 were largely unnecessary after the initial shock had passed and the velocity in the drop in unemployment was already strong. Or they may have been warranted at a much smaller magnitude with more discretion in who received benefits.
The consequence now is that the economy is so overstimulated, we basically have to force the recession we would have had anyway to prevent it from overheating. So we'll end up in the same place, but with a ton of extra debt to service
There is a lot wrong with our education system (including guaranteed infinite loans incentivizing high tuition prices -- a better system would be to just have some state schools be free, and like in Europe, more competitive. They would only be for people who really need them financially and have great potential academically). However, resetting student loans and letting the system continue is definitely NOT the solution.
> It literally hurts no one to forgive the loans
Also want to address this, because I feel like it's a common misconception, especially with Gen Z. It's basically an inflationary policy to forgive debts. So it does hurt anyone who is affected negatively by inflation, while certainly not being "fair" for the reason mentioned above (some responsible adults actually paid their debts and are penalized for that). We all make mistakes (such as taking out massive loans to go to acting school and having it not materialize), but consequences are the side effect of living in a consistent reality. If you make financial reality inconsistent by forgiving loans, you incentivize more of that bad behavior. Also note that most degree holders with student debt are not the lower class, but the middle and upper middle class. Student loan forgiveness is a handout for an educated class of people who are generally doing much better than the poorest in society.
Since most of that 30% have low income and come from low income backgrounds it will be a struggle to get it passed. A shame as those are the ones that need it the most. It’s interesting to note that Social Security was designed to cover 100% of the population even though only a smaller segment needed it, specifically to make it harder to kill. For student debt that would be an impossible sum and unnecessary.
Student debt problems are entirely self-inflicted. Students taking the loans made their own decisions. Social Security users have been paying for decades (not taking, as the student loan recipients were). Social Security users, especially those who have not yet started collecting, have worked decades to get their benefits back.
If students get their loans paid off before Social Security is fixed, it's a certain sign of corruption. (Votes for money.)
Use your votes to make government effective. Vote for politicians that pledge to fix Social Security.
Remember, older folks don't have time to remain in the labor force (unlike younger people, who will benefit from rising paychecks.) At the end of the spectrum, there is only what has been saved (which is reduced by inflation) and pensions, Social Security.
In case anyone is curious, please note the following excerpt from https://en.wikipedia.org/wiki/Social_Security_Act
> Job categories that were not covered by the act included workers in agricultural labor, domestic service, government employees, and many teachers, nurses, hospital employees, librarians, and social workers. As a result,
> > 65 percent of the African American workforce was excluded from the initial Social Security program (as well as 27 percent of white workers). Many of these workers were covered only later on, when Social Security was expanded in 1950 and then in 1954.
FDR’s racial attitudes (or perhaps rather lack of interest in the issue) is rarely discussed, so thanks for bringing that up as well.
For example another poster recommends free or low-price state schools, instead of handing out mountains of freshly created money. One of those is incredibly inflationary, the other is not.
These policies are in line with that, a unequivocal transfer of money from structured hard working families to unstructured broken ones. Removing incentives for the former and adding them for the latter.
It's very easy to destroy social fabric top down, but it can only be created bottom up.
Notice less government is therefore the answer regardless of why we keep getting these outcomes.
How do you figure?
It's not a black/white situation of choosing between economic collapse or hyperinflation at all. And keep in mind there were 3-4 huge packages passed. It's not like this had to be done as a single rushed magnum opus bill, this is the consequence of many bills and executive actions passed over 2 years, coinciding with a Fed that had unilateral power to ease the brakes yet did nothing for 2 years.
I'm not really that familiar with legislative processes, but this seems ridiculous if it's true. Isn't it the job of the house to write bills? What else do they have to do? Why won't they get another shot?
I think it's just a lack of political will. Not from regular people, but from politicians. People love to point to a huge 1000+ page bill that didn't pass because the guys voted it down and say "oh well we can't have X because the other guys voted against it". If "your guys" are really interested in having X, why don't they just write another bill that contains the minimum language to enact it?
We should really reject these massive "omnibus" bills out of principle. No one even reads them! There's no reason we can't have simple, targeted legislation that is limited to exactly one topic.
There’s nothing wrong with doing that (people sensibly borrow to purchase and use assets all the time). And when people are in the middle of a crisis it’s appropriate to take action (even in a drought the fire brigade sprays water on a fire).
But it’s worth looking retrospectively to figure out how much to do next time, not to be absolutist about it one way or the other.
Perhaps its because I work on the backend side of businesses (specifically the tax part) and so I actually get to see the financial numbers, but I am aware of over ten thousand jobs in SoCal alone that were saved by the PPP bailout.
It's disturbing to see the vaguely sociopath comments on this thread by tech workers who were largely unaffected by COVID complaining about "interfering" with the markets and about "bailouts."
A lot of businesses were hit hard by COVID. For tens of thousands of businesses, the COVID PPP loans were the only source of revenue they had at a time when government restrictions (i.e., the lockdowns) were inhibiting their sources of revenue. (And guys, we were in a pandemic that killed millions worldwide. Even after the lockdowns ended, many people were scared to go out for months.)
And even with the PPP loans, many small businesses didn't survive the lockdowns. Margins are low in many industries. Not everything is tech where you can bumble along without profits or purpose for a decade surviving on fat VC money.
I have done some initial quantitative analysis on the raw survey responses, but not gone further, since you know, daily troubles. The small business situation is deeply changed in the last two years, and this is not over at all.
https://pagesix.com/2021/06/28/tayshia-adams-and-more-bachel...
If you had bothered to follow up on that, you would have learned that all of these Bachelor(ette) contestants employed other people and used the PPP loans to pay those salaries during the PPP period when their normal revenue streams were unavailable due to COVID restrictions (Tayisha Adams actually went into detail about how and why she used the loan in the linked article). Which was quite literally the point of the PPP loans.
But I get that critical thinking is hard when you have an ideological point to make and you just want to shit talk other people.
Guess what? A lot of tech companies also took out PPP loans. Former HC darling Mixpanel took PPP loans. As did Bird, and a number of dating apps. (https://www.cnbc.com/2020/07/06/ppp-loans-to-tech-start-ups-...) Are we calling them unscrupulous too?
Much lower income thresholds should have been applied to stimulus checks. Student loan debt should not have been paused for high earners. Interest rates should not have been pegged at 0 while asset bubbles formed over all asset classes.
That's called rational and responsible policy.
Enforcement could have been retroactive to avoid delaying disbursement of funds. It's not hard to write sensible legislation, even under a time crunch.
And hardships come naturally to business all the time. It's not the government's role to save everybody in every situation. Companies that were financially irresponsible or poorly run should naturally fail when economic times get rough.
The road to hell is paved with good intentions. We saved everybody just to end up with massive inflation which will require forcing the economy into recession anyway, defeating the entire purpose and impact of the stimulus.
Make no mistake, unemployment will spike in a big way as the Fed tightens, just as it has essentially every other time they had to tighten to curb inflation.
The aid was right, the magnitude was far overdone. It will be quite obvious to historians, though it's obvious even now.
But I will say on one point (Companies that were financially irresponsible or poorly run should naturally fail when economic times get rough.) These companies ere struggling because the government shut everything nonessential down. The point of the PPP was to make up for that fact that the government, during a global pandemic that killed millions wouldn't let people go to work.
Next time you want to discuss the merits of the PPP, step outside of your tech bubble and think about what COVID was like for all of the non-tech companies whose functions can't be done from home.
Was it an all or nothing situation? No, not at all. So either you're being intentionally misleading, or lack critical thinking. The option in front of politicians wasn't do these bills in this exact form or nothing at all. Why act like it was? It's a false premise.
Is it due to a bias in trying to justify the inflationary result?
And you seem to lack understanding of the consequence of high inflation, which inevitably will be higher unemployment, hurting those you sought to help. Study any history of the relationship between monetary policy, inflation, and unemployment and it's pretty obvious.
Inflation is not a bad thing; in fact, low-to-moderate inflation is desired. High inflation is not because it generally means that base or fixed cost growth (i.e., food and oil) is outpacing productive growth (pretty much everything else).
The option in front of politicians wasn't do these bills in this exact form or nothing at all. Why act like it was? It's a false premise.
No it wasn't, but it was the best package they could put together, and it took months to get that far due to ideologues blocking better/more efficient options.
It's for armchair economists like you to debate the theoretical perfect relief package that they should have passed, in the non-existent fantasy la la land where that would have been possible. Of course, in that fantasy land, COVID wouldn't have happened, and our economy would not have become dependent on JIT inventory.
While I wouldn’t say that the policy as implemented was optimal, I think it’s worth considering the conditions under which it was made.
Each policy like this needs to balance the efficiency of the program with its coverage of those who need help. As an example, giving money to everyone unconditionally would have ensured full coverage, but it might not be very efficient. However, each restriction added to make the aid more targeted risks excluding people who genuinely needed help (reducing coverage) and _also_ increases costs since now the restriction needs to be tested, there needs to be an enforcement apparatus for those who violate it, etc. This is an uncertain calculus.
Then there’s the political reality that policy is not created by a benevolent dictator but instead through compromise among many individual parties, each of which has their own agenda and priorities, some of whom are acting in bad faith. Each decision point leads to more debate (should this group be in or out? should this threshold be X or Y?) and hassle, while in the background there are people suffering right now. After some point, you have to give up and accept the imperfections just to get it done.
Finally, politics being what they are, no matter how effective, helpful, and efficient the program is, the government’s reward for shipping the aid package is that the opposition party will decry it as wasteful and unnecessary. Every flaw will be amplified as part of their overall political messaging, and armchair analysts with the full benefit of hindsight will critique every decision. I can’t imagine that provides great motivation to put a lot of effort into polishing and tweaking the policy into perfection.
All of this is not to say that we shouldn’t strive for better programs and government—we absolutely should—just that it is a tremendously difficult problem.
Just an example of truly inept leadership in multiple departments and at the top.
This particular issue over the last year or so has gotten worse, with more eyeballs on it, once actual money became involved (before it was still an issue but on a smaller scale mostly for the free edu emails we tend to issue, along with other freebies that can help enable, such as free credits for Azure or other services).
Even in the previous cases, I was annoyed/upset because in my mind the first line of defense the colleges have is preventing these fake users from being able to submit an application successfully in the first place, since the OpenCCCApply application (which I believe is used by all ~115 CCCs) was allowing the submissions in the first place…and since we mostly bring that application data into the individual colleges, not many triggered a “hold” on our end.
Yes, CCCTechCenter (which helps manage the team which maintains the OpenCCCApply system) have done a few things over this past year that are mentioned in the article already (but based on the article I can’t tell 100% if it is really indicating the issue is still rampant in the more recent semesters…one of the changes was adding usage of an IP reputation checker in for example, but there are likely ways around that too for these folks who actually don’t seem to actually use bots…maybe they use actual people instead based on what I’ve seen, such as the YouTube video shared in the article).
What I found really annoying by it all is that while the problem originated from the systems being provided to the colleges from the state level (OpenCCCApply mainly), the individual colleges are now on the hook to gather a bunch of mostly useless data, and go on silly adventures such as investigating IP address info within our other systems (like Canvas) to help find or report the fraudulent activity.
I think I saw FAFSA mentioned a few times but I don’t think there is a ton of fraud coming from the FAFSA application too directly…but in this past year many of the colleges have been putting COVID relief funds they’ve received (to help get students/staff back on campus) and using those to pay for fees or provide an extra amount for books, etc. which isn’t something that will continue forever (in fact, I think for this summer this will already have ended, or it will be the last semester where it will be offered).
In most cases, once the incentive is taken away, or the bar to get it is made higher, these folks creating the fraudulent accounts will generally move on (or target schools that don’t implement some of the 2nd layer fixes at the college level…unfortunately while the CCCTechCenter tries its best, it doesn’t typically fully acknowledge its role in creating some of these situations, and I almost lol’ed when I saw towards the end of the article I saw they are looking to get more funding to “modernize” it, yet again, considering a lot of effort / time / money already has gone into creating the current OpenCCCApply system not that long ago from the previous system, which was pretty bad in comparison).
Overall though this particular situation is at the same both more complex and simpler than folks may think, once you have some more details (more complex because there is a lot about what’s going on in the CCCs the HN community isn’t aware of, along with super strict regulations that have to be followed within the individual Financial Aid departments at each school, otherwise they win not be able to provide federal aid monies to students if they weren’t doing so, making that avenue for fraud a lot more less likely than the scenario I shared above on how the COVID relief monies have been being used instead to provide an incentive to get students back in the classroom…along with the solution being simpler since we already have a central application process that should be the system that keeps these applications from ever reach...
This leads to number of students still being a pretty big factor in the funding received for the year. From Administrators I would say if any are worth their salt, ignoring any sort of fraud would be a no-no so I’m hoping that’s not a common situation being observed. On the other hand, losing a substantial percentage of your current budget due to a loss of students can be pretty tragic for the staff working on the campus. Budget reserves can usually be dipped into for a period of time, but what most folks don’t know or realize is that compared to private businesses where the cost of employees may be only a fraction of what the business brings in profit, most CCCs are likely spending 80-90% of their budgets on salaries and benefits for their staff (in some cases the % may be more, in some cases it may be less). This makes it extremely difficult most of the time to weather a big loss in students because if budget reserves get expended, and student numbers don’t improve, that’ll mean some sort of layoff process…which also provides those employees with reinstatement rights too for a considerable period of time afterward).
I haven’t heard much of any America specific big time fraud in this area either. If any implication was this article. That doesn’t count since the article isn’t saying aid is happening unlike Sweden.
And then more quotes back that up.
Just make people register on site. Still via computer but in person. Problem solved. This is community college where everyone is local.
https://www.latimes.com/california/story/2022-03-22/some-com...
This happens because our political systems have no incentives to prevent it from happening.
Not to mention that even getting the aid in the first place requires filling out a FAFSA form-- difficult to provide fake tax returns-- and about 10% are randomly selected for verification as well.