, a leader in providing financial services and data analytics to over 1,250 college and university campuses across the U.S., announces it has entered into an exclusive agreement with
to bring solutions to higher education that proactively identify suspect student enrollments and applications through the use of advanced data analytics.
Individuals and fraud ring leaders, known as “Pell Runners” and “Straw Students,” are using various tactics such as identity theft to defraud and exploit the U.S. financial aid system that, according to the
Department of Education
, processes more than $145 billion in federal funding annually. The crime of financial aid fraud has escalated in recent years and incidents have been found to be most prevalent at community colleges and institutions that offer online courses and long-distance learning.
Higher One will offer iDatafy’s proprietary technology, the first contributory database designed to proactively identify and fight financial aid fraud. This database prevents institutions from becoming victims by auditing their existing student enrollments and new applications through the detailed analysis of student information and records, a process which is compliant with the Family Educational Rights and Privacy Act (FERPA). The patent pending technology has the ability not only to recognize patterns and abnormalities in data that reflects students who appear to share similar contact information, but also flags whether a particular student has habitually taken aid from a number of other institutions and then dropped out. Reports generated can help isolate suspect applicants and existing student enrollments that could pose a fraud risk for the institution.
“Criminals have no place in the financial aid system. In two recent data studies at separate universities, iDatafy’s technology was able to detect two out of three Pell runners and straw students within seconds,” said David Wengel, founder and CEO of iDatafy. “This type of detection would traditionally take a school years to identify. Working with Higher One to bring this proprietary technology to higher education was a natural fit since they are the national leader in providing secure electronic disbursement of financial aid and have been very involved with their clients in the efforts to fight fraud.”