The indictments say the defendants organized groups of people to sign up for classes, paid tuition, and then pocketed the remaining financial aid intended for books and lodging.
Six fraud rings are charged with taking $870,000 in taxpayer-funded aid.
The U.S. Attorney for the Eastern District is Benjamin Wagner. He says 17 online schools and community colleges made for easy targets, "When people sign up for online programs they're not there in person. There's very little or no direct face-to-face contact between the institution of higher education and the student who is applying."
The Inspector General's office at the U.S. Department of Education says it has been urging schools to do a better job screening their students. Though several schools failed in that regard, investigators are crediting them for discovering the fraud after the fact.