How does Education Fraud works?
Higher education has become a lucrative business for thousands of colleges and universities across the country. Most of these institutes rely on the $150 billion they receive in federally backed student loans and grants to stay in business, so they can keep driving up enrollment prices without worrying about attendance. However, many schools still turn to fraud to increase their bottom line. Anti‐kickback laws are violated by illegally paying recruiters commissions, students grades are inflated to qualify for more grant money, and accreditation standards are failed to comply with in order to save on expenses. These education scams leave the future graduates with lackluster career prospects and overwhelming debt.
Unlike publicly funded state colleges or private nonprofit universities, for‐profit schools treat education as a business and try to maximize their profits by increasing enrollment while saving money on expenses like teacher salaries and extracurricular activities. High-pressure and deceptive sales tactics are often employed, such as misrepresenting the quality of their facilities and programs. A 2010 report by the Government Accountability Office found that almost all for‐profit institutions devised suspect and potentially fraudulent business practices. All forms of education fraud are prosecuted under the False Claims Act, which has its own provisions for whistleblower protection and rewards.