'Ghost students' invading campuses, scamming millions of dollars away and blocking out real undergrads
Millions of dollars are being taken by scammers who are posing as dead individuals and college students to access financial aid.
Live video checks, government identification, and artificial intelligence tools are now being fielded to counter the costly schemes.
A nationwide wave of fraud involving fake college applicants, dubbed “ghost students,” is threatening the integrity of federal student aid programs and costing schools millions.
On June 6, the U.S. Department of Education identified nearly 150,000 fraudulent identities tied to FAFSA applications. Officials warn that identity theft and AI-generated fake enrollments are swamping financial aid systems and diverting taxpayer dollars meant for real students.
Many of the fraudulent payments previously reported by Campus Reform were distributed to deceased individuals.
[RELATED: California Republicans call for probe into reported college aid fraud]
Fraudsters use stolen or synthetic identities to apply to open-access colleges, secure admission, and claim federal financial aid. Some even submit basic coursework to avoid detection before cashing out.
Colleges across the country are reporting massive losses. The College of Southern Nevada alone wrote off $7.4 million in fraudulent aid during Fall 2024. Minnesota schools report hundreds of suspicious applications each year, and California’s community college system flagged over 79,000 fake submissions since launching a new detection tool.
The losses are not just financial. Prospective students are being boxed out by the synthetic applicants.
To combat the surge, the Department of Education will implement live video identity checks for flagged applicants beginning fall 2025. Schools will be required to collect and store valid government-issued ID as part of new federal compliance protocols.
[RELATED: $30M in federal student aid went to deceased individuals, Ed Dept found]
The private sector is also helping to thwart scammers.
An AI platform called LightLeap.AI, developed by N2N Services, identifies fraud based on application behavior and is now working to defend colleges from the damaging scheme.
“Community colleges are open access, just like physical campuses where anybody can just walk in,” N2N Services CEO Kiran Kodithala told Fortune. ”And that’s by design.”
The fraud epidemic has added pressure to already overwhelmed campus systems, forcing staff to sort through fake applications that delay real students from enrolling and receiving aid.