Latest news with #Hetts
Los Angeles Times
24-06-2025
- Business
- Los Angeles Times
1.2 million fake students applied to California community colleges last year. What's being done?
California community college officials are working to overcome a serious predicament involving hundreds of thousands of fake students and hefty financial aid losses. It's possible this multimillion-dollar problem could be solved, in part, with a $10 fee. At a meeting last month of the Board of Governors of the California Community Colleges, officials discussed a proposal to charge prospective students a $10 application fee — applying to one of the state's 116 community colleges has historically been free. As officials prepare to put into place measures to prevent fraud, the charge is one more possible way to weed out those who are gaming the system to steal millions in financial aid dollars. At the May 20 meeting, the proposal seeking approval to explore the implementation of a 'nominal' application fee was met with lengthy and spirited debate — with some fearing the fee would be seen as an obstacle for new students, many of whom are low-income. But the severity and volume of the fraud have caused the chancellor's office to consider the charge, which would represent a fundamental change from the system's open-access model. Of those who applied to state community colleges from January through December 2024, 31% were determined to be likely fraudulent. That's more than 1.2 million applications, according to data from the office of the chancellor for the college system. Anyone who applies to a California community college is admitted. This accessibility, coupled with the increase in remote and hybrid formats for classes since the COVID-19 pandemic, creates vulnerabilities that scammers exploit to cash in on both state and federal financial aid. Fraudsters, with the help of stolen identities, bots and artificial intelligence, act as dozens or even hundreds of students. They join classes and remain enrolled until they receive their financial aid checks. The fake students often take up limited spots in classes actual students need to take, creating headaches for both students and staff. Although any financial aid goes toward tuition first, low-income community college students pay little or no tuition in California, meaning they receive funds directly to use for books, housing, food or other needs while they're in school. Some fraudsters have spent that cash on plastic surgery, elaborate vacations and designer bags, federal officials say. The state's community colleges have seen a steady increase in fraudulent applications and enrollment in recent years. In 2022, The Times reported that 20% of recent traffic on the main portal for online applications was malicious and bot-related, meaning that by early 2025 — in less than three years — such traffic jumped by more than 10%. Although 31% of applicants were deemed likely fraudulent last year, that doesn't mean 31% of students in the community college system are fake, noted John Hetts, the executive vice chancellor for research, analytics and data for California Community Colleges. Hetts emphasized to The Times earlier this year that those fraudulent applicants were detected and then shut out of the system, preventing them from enrolling and stealing financial aid. Officials said individual campuses' improvements in detecting fraud had increased the percentage of fake applications that were stopped — but there have also been more attempts. The around 30% of applicants that were probably fake in 2024 represent about 85% of fraudulent attempts, according to Chris Ferguson, the executive vice chancellor of finance and strategic initiatives, who spoke at last month's Board of Governors meeting. Data from the chancellor's office show that about $8.4 million in federal aid and $2.7 million in state aid were stolen by scammers in 2024. That's only a 'very, very small percentage' of total aid that's disbursed at California's community colleges, according to officials from the chancellor's office. In 2024 through 2025 to date, students received roughly $2 billion in total aid from all federal sources, including loans and Pell Grants, and about $1.5 billion in state aid, the officials said. From January through mid-April of this year, $4 million in federal aid and more than $760,000 in state aid have been disbursed and written off as fraud by California community colleges, according to chancellor's office data. With more than 2.1 million students who collectively receive billions in aid, Hetts said his office was 'fairly proud' of its record. 'We can absolutely get better. There's no question. Any dollar we lose, we don't want to lose that dollar, but we are fighting really hard,' he said, and the 'vast majority of attempts' are stopped. Officials at the chancellor's office said they couldn't share the specific mitigating measures they had put into place to detect and prevent application, enrollment and financial aid fraud, but they said they were undertaking a 'complete redesign' of the application system. The new system, which they hope to roll out by spring semester 2026, will have integrated fraud detection tools. Ferguson said if fraudsters are stopped at the application stage, it would have a 'downstream impact' of preventing enrollment and financial aid fraud. Jason Williams, an assistant inspector general at the Department of Education's Office of Inspector General, said financial aid fraud is not a new phenomenon; neither is it exclusive to California. His office investigates fraud rings across the country that specifically target community colleges for their lower tuition costs, which means scammers can collect a larger chunk of leftover financial aid dollars compared to a more expensive school. But 'as we change and close loopholes, they find new ones,' Williams said. 'We have to make sure that we're evolving with the fraud and make sure we're keeping up with what's going on so we can continue to be effective.' Williams said the fight against fraud could become more challenging as the Trump administration attempts to dismantle the Education Department. Mass layoffs at the department were blocked in May by a federal judge. The Trump administration then asked the Supreme Court earlier this month to leave the layoffs in place. The department's Office of Inspector General has not been affected by layoffs, but it has lost about 20% of its workforce since the beginning of the fiscal year last fall due to deferred resignations and voluntary buyout programs that were offered to all federal employees when Trump took office, officials said. That decrease in staffing is having a noticeable impact, Williams said, especially as the federal hiring freeze is preventing the team from filling crucial roles. Amid the layoff turmoil, the workload will likely increase for the department as it institutes a new procedure to combat fraud. The Education Department announced earlier this month it's implementing a new rule that would require financial aid applicants to present, either in person or in a live video conference, an unexpired, valid, government-issued photo identification to their school, and the school must preserve a copy. The change will go into effect in the fall, and in the interim, colleges will have to validate the identity of certain first-time applicants who are enrolled in the summer term. 'When rampant fraud is taking aid away from eligible students, disrupting the operations of colleges, and ripping off taxpayers, we have a responsibility to act,' Secretary of Education Linda McMahon said in a news release announcing the change. As for the creation of a $10 application fee at California's community colleges to combat fraud, it's a 'potential consideration and not a foregone conclusion' for now, a spokesperson for the chancellor's office told The Times. Any new fee must be authorized by state statute. Staff at the chancellor's office said they are not trying to create an obstacle for hopeful students, just hoping to put up an additional barrier for fraudsters. The fee is not being discussed as a potential revenue source, and officials said it could potentially be waived, refunded or credited to students with demonstrated financial hardship. There was 'great deliberation' over the fee at the May board meeting, said Jory Hadsell, an executive at the chancellor's office focused on strategic technology initiatives, 'but also a sense that we need to move with urgency to safeguard the access for all of our students.' The system now works with the IT security company to help verify identities of applicants. But at the individual college level, staff and faculty have become familiar with the process of determining whether their students are real by checking for 'authentic engagement' in classes, according to Hetts from the chancellor's office. They're also more familiar with some of the tricks fraudsters try to pull. One person attempting to enroll in the L.A. Community College District came to an in-person meeting to verify their identity and presented a California driver's license with the weight listed in kilograms, said Nicole Albo-Lopez, the deputy chancellor of LACCD. Examples like this remind her that although the students in these schemes — filling up classrooms and stealing taxpayer dollars — are not real, the people behind the scams are. 'This isn't just a computer or a robot out there,' Albo-Lopez said. 'These are real people that are committing these crimes, and technology has been weaponized to attack other sectors. Higher education just happens to be the one they're focused on right now.'
Yahoo
24-04-2025
- Business
- Yahoo
California colleges fight cyber battle with scammers who've stolen $10M in federal aid meant for students
California laws require that community colleges in the state accept any legitimate student, and state lawmakers have spent decades making enrollment easier so everyone gets a chance at an education. Unfortunately, as the non-profit news agency CalMatters reveals, scammers are using this to their advantage, enrolling in California's community colleges as fake students to steal millions in federal financial aid. I'm 49 years old and have nothing saved for retirement — what should I do? Don't panic. Here are 5 of the easiest ways you can catch up (and fast) Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how Nervous about the stock market in 2025? Find out how you can access this $1B private real estate fund (with as little as $10) The rise of AI has only made this process easier for thieves, as they can use ChatGPT to create written responses aimed at verifying their identities. Here's how the scam works, along with some details on how it's leading to stolen federal funds and potentially putting schools at risk. Fake students are a big problem in California community colleges, and the problem is growing. According to CalMatters, in 2021, the California Community Colleges Chancellor's Office reported that 20% of applicants were likely fake. That jumped to 25% in 2024. Now, the state believes one in three student applications — 34% — is fake. "Those are all the ones that are stopped,' John Hetts, executive vice chancellor for the data team at the chancellor's office, told CalMatters. Read more: This hedge fund legend warns US stock market will crash a stunning 80% — claims 'Armageddon' is coming. Don't believe him? He earned 4,144% during COVID. Here's 3 ways to protect yourself Colleges report that the imposters have stolen millions in financial aid in the past few years; the scammers have siphoned off more than $10 million in federal funds and $3 million in state funds in the past 12 months alone. While it's true that this is just a small share of the $1.7 billion in federal aid and $1.5 billion in state aid distributed to California's community colleges, it's still a lot of money lost to fraud. Since 2022, officials have spent $150 million on cybersecurity to fight back against the growing scam. The chancellor's office even enlisted the help of tech companies. Individual schools have contracted with to provide ID verification for enrollees. Hetts said it's an ongoing battle, as every time colleges update technologies to keep fraudsters out, the bad actors adapt with new techniques. Hetts added that many students accepted at California's community colleges, including foster children and undocumented individuals, don't have much documentation, making the process of separating legitimate applicants from fraudsters even harder. Federal and state funds are likely to continue to flow to the thieves, as real students who need financial aid and a good education are competing with bots for space. Teachers are now forced to take on a policing role and root out fake students. They have to do it fast as it's difficult to remove students after the first week of school. Then there is a financial penalty for dropping students — even if they're fake. Funding is pegged to enrollment. 'If they see I'm running a class that starts with 35 students and ends with 15, that looks terrible," said librarian Heather Dodge, who teaches an online research course at Berkeley City College. Federal officials helped fight such fraud in the past, with the Department of Education opening an investigation in 2022 into a fraud ring using the identities of 57 individuals that stole $1.1 million in student aid over four years. However, community leaders already felt the federal government could do more, even before the cuts. Unfortunately, leaders at these colleges warn that the Trump Administration's recent cuts to the Department of Education are likely to exacerbate this growing problem, especially given that the office in charge of administering federal financial aid has lost around half of its staff since Trump took office. 'When you direct less resources to combating fraud … you're going to get more fraud,' Hett said. Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan 'works every single time' to kill debt, get rich in America — and that 'anyone' can do it Rich, young Americans are ditching the stormy stock market — here are the alternative assets they're banking on instead Here are 5 'must have' items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you? This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
Yahoo
10-04-2025
- Business
- Yahoo
Janus Henderson says investors should cut down exposure to stocks as recession looms
By Saeed Azhar NEW YORK (Reuters) -Janus Henderson, which manages $379 billion in assets, is advising investors to cut stock holdings and buy more investment-grade sovereign bonds as tariffs threaten to slow global growth, a fund manager said. Janus Henderson now recommends a portfolio of 55% equities and 45% bonds, compared with its call at the start of the year for 62% equities and 38% bonds, Adam Hetts, global head of multi-asset at Janus, told Reuters. "We don't think this is the environment that clients want to buy the dip quite yet, because there could still be more downside," Hetts said. He cited a negative scenario of "the 10% baseline, the tariffs on autos, aggressive counter tariffs and trade war-style escalation with China and Europe." His base case is for a market selloff and the potential for bearish and recessionary cases to take hold. The stock market could go from a disorderly selloff to a more orderly selloff because the recession risk "is much, much higher" than it was a couple of weeks ago, Hetts added. Wall Street's main indexes extended declines in afternoon trading on Thursday, with the benchmark S&P 500 down more than 5%, as investors worried about the economic damage from U.S. tariff policies. The slump reversed a Wednesday rally after President Donald Trump declared a 90-day tariff pause for many countries but raised the levy on imports from China to 125%. "We've gone to an equity underweight in the portfolios," Hetts said, more neutral on U.S. assets and slightly underweight on international investments. "We're headed towards a tariff-induced global slowdown right now in the very short term. Europe and China could have potentially more downside than the U.S., but coming out of that, that might be the place to go," he said. He cited fiscal stimulus in the wake of Germany's elections, potential resolution of the Ukraine-Russia conflict and fiscal stimulus in China as factors that may be catalysts for recoveries in Europe and China. "There are these potential upside catalysts in Europe which was much cheaper as a starting point than the U.S. and then China's been committed to fiscal stimulus and we think that's a story that will play out for quarters to come," he said. For now, investors should allocate more funds to high-grade sovereign bonds to preserve capital, Hetts said. "When we're looking to de-risk... we're looking at investment grade sovereigns, and less so credit because we're also seeing volatility in credit," he said. Sign in to access your portfolio
Reuters
10-04-2025
- Business
- Reuters
Janus Henderson says investors should cut down exposure to stocks as recession looms
Summary Companies Janus Henderson recommends 55% equities, 45% bonds amid recession fears Tariffs threaten global growth, prompting shift to investment-grade bonds Potential recovery catalysts in Europe and China include fiscal stimulus NEW YORK, April 10 (Reuters) - Janus Henderson, which manages $379 billion in assets, is advising investors to cut stock holdings and buy more investment-grade sovereign bonds as tariffs threaten to slow global growth, a fund manager said. Janus Henderson now recommends a portfolio of 55% equities and 45% bonds, compared with its call at the start of the year for 62% equities and 38% bonds, Adam Hetts, global head of multi-asset at Janus, told Reuters. "We don't think this is the environment that clients want to buy the dip quite yet, because there could still be more downside," Hetts said. He cited a negative scenario of "the 10% baseline, the tariffs on autos, aggressive counter tariffs and trade war-style escalation with China and Europe." His base case is for a market selloff and the potential for bearish and recessionary cases to take hold. The stock market could go from a disorderly selloff to a more orderly selloff because the recession risk "is much, much higher" than it was a couple of weeks ago, Hetts added. Wall Street's main indexes extended declines in afternoon trading on Thursday, with the benchmark S&P 500 down more than 5%, as investors worried about the economic damage from U.S. tariff policies. The slump reversed a Wednesday rally after President Donald Trump declared a 90-day tariff pause for many countries but raised the levy on imports from China to 125%. "We've gone to an equity underweight in the portfolios," Hetts said, more neutral on U.S. assets and slightly underweight on international investments. "We're headed towards a tariff-induced global slowdown right now in the very short term. Europe and China could have potentially more downside than the U.S., but coming out of that, that might be the place to go," he said. He cited fiscal stimulus in the wake of Germany's elections, potential resolution of the Ukraine-Russia conflict and fiscal stimulus in China as factors that may be catalysts for recoveries in Europe and China. "There are these potential upside catalysts in Europe which was much cheaper as a starting point than the U.S. and then China's been committed to fiscal stimulus and we think that's a story that will play out for quarters to come," he said. For now, investors should allocate more funds to high-grade sovereign bonds to preserve capital, Hetts said. "When we're looking to de-risk... we're looking at investment grade sovereigns, and less so credit because we're also seeing volatility in credit," he said.
