Students misuse financial aid funds
More than 20 schemers take federal grant monies
On a regular basis, financial aid offices across the country experience defrauders regularly enrolling into classes and disappearing from campuses after attaining federal grant revenue.
In 2011 Contra Costa College's Financial Aid Office became the victim of what is known as a "pell runner" scheme - where more than 20 false students applied for and received federal grant monies after they were enrolled in classes they never intended to attend.
Fifty-four-year-old Yvette Hummel has served 180 days in prison and is forced to pay about $83,000 in restitution after pleading guilty to leading the scam at CCC, Contra Costa County District Lead Attorney Dodie Katague said.
Katague is the lead prosecutor who is handling the case.
"We've filed cases against 22 people so far," he said. "All of them were at least 40 (years old). (Among them) was a 78-year-old woman who was signed up for a basketball fundamentals (physical education) class."
Hummel signed up at least 22 people for financial aid who agreed to pay her 25 percent of their federal aid checks, pocketing the rest of the loot. The people were all registered to one of Hummel's two addresses where the checks would go, the lead attorney said.
Katague said there are about 20 others suspected of being involved with Hummel, however, no charges have been filed. The suspected defrauders did receive checks at Hummel's addresses, but they also earned letter grades for attending drama classes, he said.
Grades are only given to students who are on the course's roster at the semester's end. Katague said. Because they did receive letter grades, the burden of proving these people did not attend classes falls on the prosecution.
Of the people involved in the scam, none of them planned to go to class except for one - the student that Katague said turned Hummel in.
"(Hypothetically) if you were a legit student and planned on going to class, you would think, 'why would I need someone else to sign me up?'" Katague said. "One of the defenses from some of the suspects is, 'we were too stupid.'"
Katague said that there are bench warrants for eight other suspects, however, they have not been found because the prosecution does not have addresses for them.
"A lot of them took the checks and just left," he said.
Hummel's boyfriend, 54-year-old David Murphy, served 90 days in prison after pleading guilty - he has to pay $5,550 in restitution.
Once a student applies for federal grants, he or she, if qualified, will receive aid. That person will then receive a grant check based on the amount of units he or she is enrolled in, and his or her financial status, Interim Financial Aid Supervisor Jennifer Ma said.
In order for students to continue receiving aid, they must pass 67 percent of the classes they are enrolled in during the semester while maintaining a 2.5 grade point average.
"We've always had policies in place mandated by the Department of Education," Ma said. "At the end of each semester every student's progress is evaluated."
Prior to the dispersal of any checks, the Financial Aid Department staff must determine how many units each aid recipient is currently enrolled in order to determine how much the student shall receive and students are paid accordingly.
Students who are found to have completely withdrawn from all courses after receiving aid, during the same semester, will be forced to pay back the funded amount to the Department of Education, Ma said.
According to the American Association of Community Colleges, 44 percent of community college students receive aid from Pell grants. The California Community College Chancellor's Office reported that 5,231 Pell grants were awarded to CCC students, totaling nearly $10 million during the 2011-12 academic year.
"There are points in time during each semester when checks are issued," college President Denise Noldon said. "A student will receive a check as long as he or she is enrolled. It is impossible for us to check the enrollment status of thousands of students."
Instructors have the ability to drop students from courses for low attendance, however, they are not mandated to do so.
"We don't want to operate in an environment where everyone is expected to be out for no good," Dr. Noldon said.
Encouraging instructors to drop students who completely stop attending is one step toward prevention, Noldon said.
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