Accurate Attendance Records: Why It’s Necessary For Compliance and Saves You Money

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Each semester, education loan fraud by criminals who pose as students grows tremendously. Fraudsters are easily able to pose as students because they are not required to make a physical presence.

As long as a student can make it to census date, they are eligible to receive the thousands of dollars from Pell Grant monies. Keeping accurate attendance records is crucial because it’s required for Title IV fund eligibility.

However, ordinary attendance records don’t tell much beyond the fact that someone logged in with a student password on certain dates. They don’t tell you who actually logged in or if they might drop out as soon as they pocket their check.

But imagine if those records could help you identify students who may be potentially fraudulent before they drop out with their check? You have to keep the records anyway for compliance. We’ll tell you how attendance records composed of biometrically authenticated students can put more money in your budget.

But first, let’s look at why you’re required to do.

Rules for Attendance Records

Tracking official and unofficial withdrawals, Title IV calculations using (R2T4 forms), Last Date of Attendance and other requirements all demand institutions have accurate and accessible attendance data.

Federal financial aid regulations require that schools be able to document attendance in each class where students receive FSA. The Dept. of Education mandated that schools institute new “academic attendance taking criteria” to determine attendance and last day of attendance.

Why so many requirements? It’s really about fraud.

If an FSA award has been disbursed and turns out to have been given to a scammer, then it is owed back to the Dept. of Education. The institution is required to return the money to DOE whether or not they can recover the funds. Schools are forced into acting as collection agencies, but most of the time fictitious and fraudulent students are long gone.

It is a lucrative business with criminal rings as large as 800 fictitious students being reported.  Fraud typically comes from individual students, organized crime rings or unscrupulous bad actors within the institution. According to the U.S. Department of Education, improper Pell grant payments topped $2.2B in 2016.

If schools are potentially losing an estimated 4% of Title IV funds to fraudulent students, think what that means to a school that disburses $50M – $100M. That’s big money schools stand to retain.  While FSA fraud is nothing new, it is rapidly growing. This growth has spurred the federal government to step in and put pressure on institutions to fix the problem.

So, who’s on the hook? According to the feds, the schools.

Colleges and universities must make sure that all FSA money is disbursed to the students who are there for the right reasons. If not, then the school must pay back all the money. This creates a huge and unnecessary loss of revenue for the school. It can also lead to additional problems such as:

  • Lower institution retention rates
  • Possible changes in government funding models
  • Increased accountability for higher education institutions

Unfortunately, it’s not going to get any better until schools are able to detect and sort the real students from the fraudsters. Luckily, this could all be solved easily with air-tight student authentication and the ability to monitor for the signals of fraud. And it all starts with accurate attendance records.

Why Authenticate Students?

For years, the OIG and Dept. of Education have stated that schools must adhere to the following requirements associated with distance education Title IV funding:

  1. VERIFY a student’s identity throughout the ENTIRE course
  2. Determine student academic ATTENDANCE
  3. Maintain sufficient EVIDENCE of student attendance

Did you know that students logging in with just a password or PIN doesn’t qualify as meeting those rules? You are required to use a stronger method to fully authenticate your students and verify their identities throughout the course. Accreditation now depends on meeting this obligation.

The Solution

Yes, administrators could easily get fraudulent money back and return it to their budget. All they need was to simply capture student ID authentication logins between course start up and census day.

Here’s how.

BioSig-ID is a gesture-based biometric software can monitor for fraud and send early warnings to administrators that will stop loan disbursement until they can determine whether the student is truly authentic.

  • Step one is authenticating every student as they enroll at the beginning of the course or during an introductory prep course if your school offers this.
  • Step two is authenticating student ID multiple times before gradable assignments from course start to census day. (BioSig-ID complies with the new academic activity requirements)
  • Step three is add any additional information from internal sources that provide information pointing to a fraudulent student. (Ask us what these are, as they can be powerful indicators)
  • Step four is do not disburse balance of FSA UNLESS the student successfully authenticates their identity with BioSig-ID

The BioSig-ID password is drawn with a finger or mouse. Only the real student can login because no one else can reproduce their exact method of drawing. So that password can’t be shared with others. That alone is a great way to enforce academic integrity.

Once BioSig-ID is in use, distance learning institutions will be able to answer the long-posed question, “Who is taking my course online?” Its in-depth reporting tools can track everything including student attendance patterns, login locations and attempts, history, activity, and time. BioSig-ID takes the guess work out of the forensics and pinpoint the anomalies that could never be detected by an individual or even a dedicated team. Once the bad actors are found, schools can then put their regular procedures in place, issuing warning letters, or other actions they deem necessary.

How about recovering say, $400K, that you might have lost in disbursements to fake students…. would a cost-effective solution that recovers it and meets all federal regulations be worth it?

You do the math. Protect institution funds and get some help to stop the fraud.