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ED OIG Drops Tech Fixes for Identity Verification in Latest Report

Summary: In its latest report on financial aid fraud in distance education, the U.S. Department of Education (ED) Office of the Inspector General (OIG) dropped previously proposed technology-based measures for student identity verification that EDUCAUSE considered problematic. The OIG now recommends enhanced admissions documentation to address identity verification concerns, which seems much more manageable within existing institutional systems and processes. However, the OIG continues to advocate for changes in the financial aid need calculation for distance learners as well as maintenance of a standard for determining the last date of attendance for the return of federal student aid funds that could damage online distance education.

The Office of the Inspector General (OIG) for the U.S. Department of Education (ED) has raised the alarm about financial aid fraud in distance education and the need to address student identity verification in that context for the last few years. (Please see previous EDUCAUSE blog posts from November 2011, April 2012, June 2012, July 2012, and September 2012.) EDUCAUSE submitted comments to ED during its 2012 information-gathering process for potential rule-making based on the OIG’s proposed technology-based measures to help address identity verification problems, such as IP and email address tracking of digitally submitted admissions applications. EDUCAUSE argued that fraudsters would easily and quickly find ways to circumvent such measures if they were imposed, while institutions would face ongoing resource burdens as a result.

While the proposed rule-making process went dormant, the OIG continued its work on the issue. It released a new report this February detailing the results of a distance education financial aid fraud risk management audit, which involved the department as well as a small sample of institutions and accrediting bodies. In the report, the OIG identifies continuing problems for risk mitigation in this space, as well as a number of proposed solutions. The good news for EDUCAUSE members is that those proposals no longer include IP and email address tracking. Instead, the OIG now recommends tackling the identity verification issue through enhanced documentation requirements:

Additional requirements are needed to ensure that schools verify a student’s identity as part of the enrollment process. Requiring the student to provide proof of name, high school diploma, educational transcripts, or college admission test scores would help corroborate identity and ensure the student intends to obtain an education. (ED-OIG/A07L0001, February 2014, p. 16)

The collection and management of more documents during the admissions process may impose additional burdens on higher education institutions. However, these new proposals fit much more easily within established administrative systems and processes, likely lessening their resource impact while more effectively addressing identify verification. Thus, the OIG’s shift represents a positive change given the concerns EDUCAUSE previously raised.

Unfortunately, the OIG did not change course on problematic proposals regarding calculating the financial aid need of distance learning students and determining the last day of attendance for students that do not complete a course, which is used to calculate how much of the students’ financial aid their institutions must return to ED. In the former case, the OIG continues to call for eliminating room, board, and ancillary expenses from the need calculation for distance learners. While the OIG may have a point on excluding transportation expenses, elimination of the other items from a distance learner’s need calculation could require the learner to increase the amount s/he has to work while pursuing his/her education, with potential negative implications for retention and completion. Essentially, the OIG wants to equate distance learners with people taking correspondence courses, while the more appropriate comparison may be with commuting students (sans the commuting, of course), who may face significant living expenses even though they do not live and work on campus.

On the last day of attendance issue, the OIG maintains its support for the argument (and current regulation) that institutions should calculate the last day of attendance from the date of a learner’s last academically related activity. This disallows the use of the last date on which a learner logged into a course within the learning management system (LMS), for example, as the last day of attendance, which previously had been normal practice for many institutions. Instead, institutions now have to determine the last time the student submitted a course assignment, participated in a substantive interaction with the instructor or fellow students, or any of a number of other proposed measures. This creates significant record-keeping problems for many institutions while also injecting a high degree of subjectivity into the process. If an institution determines that a particular interaction counts as an “academically related activity,” can it count on ED officials to do the same? The financial implications of an institution and the department not seeing eye-to-eye could be quite significant – to the detriment of the institution, which may have to return additional funds and face financial penalties as a result.

So, the identity verification proposals EDUCAUSE found problematic may now be off the table, but concerns remain about the steps ED and its OIG are taking or may take that could negatively impact online distance education. EDUCAUSE will continue to monitor departmental statements and actions in this space, as well as work with other higher education associations and organizations on potential responses as needed.


Keeping track of the last time a student participated in a "substantive" interaction or the other measures mentioned will just make more work for fauculty who already have mounting record keeping responsibilities while they are being pushed to keep students engaged and also working to keep students on track and remaining in college till completion of their programs of study.  These measures will be more costly to the institution both financially and physically.


To avoid work overload for the faculty, the institution should form a body to investigate the on when a student's last day of attendance. These body may composed of people who are not directly working in the school. By doing this, the faculty can be effective in their current responsibilities as they do not owe more job to do. 

Moreover, it could give a fair results of investigation since the people in this group is not directly supervised by the school.