The Department of Education is intensifying efforts against “ghost students,” AI scammers, and others accused of defrauding the federal government of tens of millions of dollars, including approximately $8.4 million from California community colleges alone.
Data from the office of the chancellor for California’s 116 community-college system revealed that last year, 31% of applications—about 1.2 million—were identified as likely fraudulent, Just the News reported. The current Big Beautiful Bill seeks to root out such corruption and fraud, but most Democrats, if not all of them, remain opposed to the legislation.
The system’s vulnerability stems from its open-admission policy, allowing anyone who applies to be accepted, combined with a rise in remote learning since the COVID-19 pandemic that reduces the need for students to attend classes in person According to The Los Angeles Times, scammers exploit this by using stolen identities, bots, and artificial intelligence to enroll in classes and remain registered long enough to collect their financial aid checks.
“The biggest target for fraud rings tends to be community colleges and lower-cost institutions,” Jason Williams, an official with the Education Department’s Office of Inspector General, said on a recent agency podcast, the outlet reported. “This is because their tuition costs are lower than other schools, which increases the student aid award balance for the fraudulent student.”
While especially widespread in California, the issue of fraudulent applications extends nationwide, with reports of fraud rings operating in states such as Illinois, Louisiana, Maryland, Missouri, and Nevada. In May, the Education Department disclosed that nearly $90 million had recently been distributed to ineligible recipients across the country, including thousands of deceased individuals receiving some form of payment.
In Mississippi, a mother and daughter team recruited local individuals willing to participate, then used their identities to apply for student aid, enroll in classes, and collect the disbursed funds. They were subsequently imprisoned after obtaining $2.5 million through the scheme, said the outlet.
In Arizona, a father-son duo was apprehended for targeting $7.4 million by using around 300 stolen identities across numerous schools nationwide, according to the Department of Education’s Office of the Inspector General.
These schemes often involve so-called fraud rings, typically led by a ringleader who enlists family, friends, or others willing to provide personal information—such as Social Security numbers—to create fraudulent accounts.