Education fraud is an attempt to take advantage of federal and state funds while reducing the opportunities available to students. Education fraud can happen at all levels, from education-related grants, to public schools, all the way up to universities. It may occur on individual levels, as well as institutional.
If you have information about education fraud, you may be able to help protect the investments students make in their education. You may also be able to ensure that research funds and grant funding reach their intended destinations, bettering the quality of education in America. You can help remove bad actors from a system that benefits everyone. Finally, as a whistleblower, you may be able to receive a significant payout in exchange for your honesty in coming forward with information to fight education fraud. Whistleblowers may be entitled to payouts in cases involving successful settlements against fraudsters and scam artists. They may also be able to receive powerful federal and state protections against retaliation.
Do not wait to speak up. For a complimentary consultation about your information, contact an education fraud lawyer at Tycko & Zavareei LLP today. Our whistleblower attorneys can help you understand the choices available to you and how to do the right thing while protecting your own interests. An initial consultation is confidential and free.
Different Types of Education Fraud
Education fraud can cover a wide umbrella of fraudulent activity. Some common kinds of fraud in education may include, but are not limited to:
- Federal student aid fraud: An individual may perpetuate student aid fraud by providing false information on the FAFSA, or Free Application for Federal Student Aid. However, student aid fraud may also be perpetrated by broader institutions, such as so-called “diploma mills,” certain public colleges, or even ordinary high schools. Churning out false or inadequate diplomas just to make students eligible for loans or federal aid is a kind of education fraud. Schools may fail to provide correct testing methods, or report false rates of student enrollment, retention, or graduation. In even more extreme circumstances, they may falsify results on “ability to benefit” tests that allow students without diplomas or GEDs to qualify for federal aid.
- For profit colleges scams: For profit colleges are a kind of higher education fraud designed to prey on American dreams of advancement and bettering oneself. For profit college scams often misrepresent their student enrollment rates, professors’ pedigrees, job placement numbers, or other benefits of enrolling. They then milk unsuspecting students who are seeking to learn and enrich their lives for a series of payments that lead to either a useless degree, or no degree at all. Some signs of education scams involve offering false promises, a “guarantee” of a job after graduation, or pressure to enroll in loans or take on more debt.
- Federal grant fraud: Americorps funds are one of the pools of federal funding often taken advantage of by schools and institutions. Americorps is a national service program that is funded by federal taxes. Americorps volunteers, who are called “members,” receive certain education awards and stipends in exchange for spending three months dedicating themselves to public service. While some Americorps programs involve protecting national parks and preparing for disaster relief programs, many involve mentoring youth, working in impoverished public schools, and meeting many other community education needs. When institutions falsify Americorps service hours, or provide benefits to unqualified individuals, they harm not only the pool of taxpayer funds available, but also more directly, the community that is supposed to benefit from the program.
- Online education fraud: Online education has risen drastically since the COVID-19 pandemic. Currently, the US estimates around 17 million learners enrolled in online education, according to the World Economic Forum. When online education is backed by any kind of public fund, including paying for courses with federal student aid, student loans, or other kinds of state grant or loan initiatives, instances of fraud can be resolved by whistleblowers stepping forward.
- Research grant fraud in higher education: Grant fraud may occur in research environments or in higher education. Some kinds of grant fraud involve misreporting results in order to qualify for further aid, failing to disclose other funding sources, falsifying application information, misrepresenting program details or the qualifications of those involved, and failing to properly administer grant funds once awarded.
What is the Higher Education Act?
The Higher Education Act, passed in 1965, effectively increased financial resources available at colleges across the US. It was designed to give students greater access to scholarships and low-interest loans in support of their education. It also increased federal funding for post-secondary schools and universities and created the National Teacher Corps. The Higher Education Act is hotly debated by some sectors of government and expired back in 2013. However, it continues to administer Pell Grants, Stafford Loans, and other education initiatives.
Taking advantage of available funds through these programs under false circumstances is an example of education fraud. More commonly, institutions may falsify the amount of qualifying students they have enrolled in order to receive more aid than they should. If you are an administration official at a school, college, or university receiving federal aid and you suspect education fraud is being committed to divert funds to your employer, you have the ability to speak up as a whistleblower.
The False Claims Act and Education Fraud
The False Claims Act is a powerful federal law designed to protect and incentivize whistleblowers to report fraud. The False Claims Act applies to any false claims made in order to receive undue funding from the government, whether the claim is made by an individual, non-profit, or corporate entity. Each false claim may be subject to up to treble damages, as well as individual financial penalties assessed per claim.
This law allows whistleblowers to bring a suit on behalf of the government. If the case leads to a successful recovery of misappropriated funds, whistleblowers are entitled to receive up to 30 percent of the overall settlement.
How Are Education Fraud Whistleblowers Protected?
The False Claims Act offers protections to whistleblowers who report fraud perpetuated by their employers. For example, whistleblowers are protected from the following employment actions after disclosing information about fraud:
- Reduction of pay or hours
- Harassment or threats
- Changes in terms of employment
An employee who becomes a whistleblower who is subjected to these kinds of retaliatory actions may sue their employer for damages. They may receive up to double back pay, reinstatement in a previously held position, and reasonable legal fees.
Advantages and Disadvantages of Blowing the Whistle on Education Fraud
Some of the advantages of exposing fraud in schools include:
- Doing the right thing by students
- Ensuring student aid and low-interest loans are available to those who qualify
- Preventing taxpayer fraud
- Receiving a possible payout as a result of your honesty
- Protections against retaliation as a whistleblower that would not otherwise be available when dealing with a corrupt employer
Some of the reasons why people may hesitate to step forward to report fraud in schools may include:
- Fear of retaliation
- Connections to those performing the fraud
- Worry about “staying in their lane” or becoming embroiled in a court case
- Uncertainty about whether their information is worthwhile
Call an Education Fraud Attorney at Our Firm
If you have concerns about possible school fraud or misuse of federal grant or loan funds, do not hesitate to speak up. Consult with a qualified education fraud lawyer today who can help you assess the situation and understand how best to move forward. The team at Tycko & Zavareei LLP has years of experience in liaising with the Department of Justice, protecting whistleblower privacy, fighting for the highest possible whistleblower reward, and ensuring that bad actors are fully investigated. Our education fraud lawyers can follow through on your case, so call today to get started with a free case consultation.