12 OYS: Student loans tempting more to apply for dollars; not degrees

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News 12 at 6 o'clock / Tuesday, March 4, 2014

AUGUSTA, Ga. (WRDW) -- A rise in online education is leading more potential students to apply for college.

Some are using federal student aid as a way to supplement their income.

"Online it works best for me because I have kids and with my hectic schedule I can't hop back and forth to school," said Latoya Hameed.

Which is why the Strayer College student said she chose to earn her degree online.

She also elected to cash in on those student loan disbursement dollars. "I use the money on things that's going to benefit me and the family and anything left over I just use that towards paying off my loan," said Hameed.

While Hameed says she plans on getting her degree, that is not the intention of a growing number of students applying for federal student loans.

According to an 83-page audit report from the U.S. Department of Education Office of Inspector General, nearly a dozen online colleges and universities disbursed on average of $5,000 to more than 42,000 students who failed to complete any credits towards their degree.

"You're told you can't do that," said Dr. Joe Holt, a former college dean. But Holt said federal student loan abuse doesn't surprise him. "They're told they can't do that. You're told all you can use the money for is tuition and books," said Holt.

Auditors with the U.S. Department of Education believe in 2009 alone, the government was taken for $874 million in fraudulent student aid.

The report said: these students usually target schools with low tuition costs, such as community colleges because the credit balance paid directly to the student would be larger than a school with a higher tuition cost.

Meanwhile Hameed said she is not knocking anyone for how they spend their student loan money. "It is what it is I guess," said Hameed.

Officials said online colleges are vulnerable because they are not required to verify student identities or whether that student is who they say they are.



 
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