Non-Student Aid | Indiana | Student Loan Fraud

Reina Isom gave 50 people a class tutorial in the hard knocks school on how to use stolen identities to commit fraud. For nearly a decade, Isom devised and carried out an elaborate scheme to defraud the Department of Education out of nearly one million dollars in federal financial aid, using 50 stolen identities.

To carry out her scheme, Isom first enrolled accomplices in low-cost, online colleges using their dates of birth, Social Security numbers, and other personal information. Isom then submitted Free Application for Federal Student Aid (FAFSA) forms online to apply for loans and grants for the “student.” In completing and submitting these forms, she left blank portions that requested information about the student’s income, their spouse’s income, and their parents’ income to increase the amount of financial aid awarded by the Office of Federal Student Aid (FSA). Apparently, missing information on an application does not make that application incomplete. She directed that the excess financial aid be refunded to bank accounts or reloadable debit cards that she controlled.

She also ensured that these “students” stayed enrolled, therefore the student aid kept flowing. The “student” would complete coursework, including writing papers or using video speeches that she copied from prior students who had taken the courses in previous terms. This meant merely submitting the same assignment repeatedly, only changing the name of the student.

In total, Isom submitted more than 50 fraudulent FAFSA applications for more than a dozen different individuals, causing over $930,000 in federal financial aid to be fraudulently dispersed.

On July 22, 2025, Isom, 47, was sentenced to two and a half years in federal prison, followed by two years of supervised release. Isom has also been ordered to pay $348,148 in restitution.

The Department of Education-Office of Inspector General investigated this case.

Today’s Fraud of The Day is based on article “Hoosier woman sentenced for her role in nearly $1M in financial aid fraud” published by Inside Indiana Business on July 22, 2025.

A former Muncie woman has been sentenced to 30 months in federal prison for her part in defrauding the U.S. Department of Education out of nearly $1 million in financial aid.Reina Isom, 47, was sentenced Thursday by U.S. District Senior Judge Jane Magus-Stinson after pleading guilty to one court of wire fraud and two counts of federal financial aid fraud.

She also was ordered to pay $348,148 in restitution. That’s the amount of fraudulent financial aid that was actually deposited into her personal bank accounts or loaded onto debit cards she controlled.