It is true. Which is not to say that no one will report you, but it's pretty unlikely that anyone would bother. We have people wandering around this forum who've overstayed 20 YEARS.My DSO has said that school does not have authority to remove me, nor would they be telling the INS guys about me as it is not their job. And that I would be able to graduate smoothly even if i stay here out of status. Is this true ?
Do keep in mind that your overstay will trigger a three year ban, so once you graduate and leave, you will not be eligible to return for three years. Should you overstay more than 180 days, you'll trigger a 10 year ban.

