Feed: Slashdot
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Title: 'Ghost' Students are Enrolling in US Colleges Just to Steal Financial
Aid

Link: https://news.slashdot.org/story/25/06/14/0329...

Here's a lesson for today's colleges from the Associated Press. Online
classes + AI = financial aid fraud. "In some cases, professors discover
almost no one in their class is real..." Fake college enrollments have been
surging as crime rings deploy "ghost students" - chatbots that join online
classrooms and stay just long enough to collect a financial aid check...
Students get locked out of the classes they need to graduate as bots push
courses over their enrollment limits. And victims of identity theft who
discover loans fraudulently taken out in their names must go through months
of calling colleges, the Federal Student Aid office and loan servicers to try
to get the debt erased. [Last week], the U.S. Education Department introduced
a temporary rule requiring students to show colleges a government-issued ID
to prove their identity... "The rate of fraud through stolen identities has
reached a level that imperils the federal student aid program," the
department said in its guidance to colleges. An Associated Press analysis of
fraud reports obtained through a public records request shows California
colleges in 2024 reported 1.2 million fraudulent applications, which resulted
in 223,000 suspected fake enrollments. Other states are affected by the same
problem, but with 116 community colleges, California is a particularly large
target. Criminals stole at least $11.1 million in federal, state and local
financial aid from California community colleges last year that could not be
recovered, according to the reports... Scammers frequently use AI chatbots to
carry out the fraud, targeting courses that are online and allow students to
watch lectures and complete coursework on their own time... Criminal cases
around the country offer a glimpse of the schemes' pervasiveness. In the past
year, investigators indicted a man accused of leading a Texas fraud ring that
used stolen identities to pursue $1.5 million in student aid. Another person
in Texas pleaded guilty to using the names of prison inmates to apply for
over $650,000 in student aid at colleges across the South and Southwest. And
a person in New York recently pleaded guilty to a $450,000 student aid scam
that lasted a decade. Fortune found one community college that "wound up
dropping more than 10,000 enrollments representing thousands of students who
were not really students," according to the school's president. The scope of
the ghost-student plague is staggering. Jordan Burris, vice president at
identity-verification firm Socure and former chief of staff in the White
House's Office of the Federal Chief Information Officer, told Fortune more
than half the students registering for classes at some schools have been
found to be illegitimate. Among Socure's client base, between 20% to 60% of
student applicants are ghosts... At one college, more than 400 different
financial-aid applications could be tracked back to a handful of recycled
phone numbers. "It was a digital poltergeist effectively haunting the
school's enrollment system," said Burris. The scheme has also proved
incredibly lucrative. According to a Department of Education advisory, about
$90 million in aid was doled out to ineligible students, the DOE analysis
revealed, and some $30 million was traced to dead people whose identities
were used to enroll in classes. The issue has become so dire that the DOE
announced this month it had found nearly 150,000 suspect identities in
federal student-aid forms and is now requiring higher-ed institutions to
validate the identities of first-time applicants for Free Application for
Federal Student Aid (FAFSA) forms... Maurice Simpkins, president and
cofounder of AMSimpkins, says he has identified international fraud rings
operating out of Japan, Vietnam, Bangladesh, Pakistan, and Nairobi that have
repeatedly targeted U.S. colleges... In the past 18 months, schools blocked
thousands of bot applicants because they originated from the same mailing
address; had hundreds of similar emails with a single-digit difference, or
had phone numbers and email addresses that were created moments before
applying for registration. Fortune shares this story from the higher
education VP at IT consulting firm Voyatek. "One of the professors was so
excited their class was full, never before being 100% occupied, and thought
they might need to open a second section. When we worked with them as the
first week of class was ongoing, we found out they were not real people."

Read more of this story at Slashdot.

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