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SAN JOSE, Calif. (KGO) — We are losing millions of tax dollars right now to what are known as “ghost students” — online scammers who enroll in community colleges and get away with financial aid meant for actual students from the Bay Area.
I-Team reporter Dan Noyes worked on a joint investigation with ABC News.
These ghost student scammers mainly come from overseas, and they are a problem throughout California and across the country. They often use artificial intelligence to expand their reach and evade fraud detection controls.
Admissions staff for San Jose’s community colleges are stretched thin trying to catch ghost students who use stolen or fake identities to enroll in classes and obtain financial aid. The online scammers have had a real impact.
“We would have courses where we’d have 50 seats and another 100+ on a waiting list,” San Jose-Evergreen Community College District Chancellor Dr. Beatriz Chaidez told the I-Team.”And we would find that maybe six of those actual enrollees were students and the rest were fraudulent accounts, ghost students.”
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Chaidez said she’s seen the most fraud in asynchronous courses in which students can work online at their own speed, but also with in-person classes.
Murat Mayor, 58, is a business analyst with a PhD.; he has no interest in attending community college. But as he began applying for financial aid for his teenage son, he discovered that scammers had stolen both their identities, signing the father and son up for community college classes across the country.
Mayor said, “We noticed that there were a lot of activity. There are a lot of applications, loan applications, grant applications. Then we panicked.”
California Community Colleges confirms that in 2024 — the most recent data available — 31.4% of all applications to the state’s 116 community colleges were fraudulent. The scammers are sometimes able to navigate the system of enrolling, getting accepted and applying for financial aid to get away with millions of your tax dollars.
DAN NOYES: “Can you give me an idea of the amount of money that was actually sent to the bad guys over the past three, four or five years? “
DR. BEATRIZ CHAIDEZ: “Right, without providing you an actual amount, I can tell you that it is in the millions. So, they were able to defraud the system of millions of dollars, and those millions of dollars would have gone directly to our students, in financial aid resources.”
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The total lost to financial aid fraud in 2024, according to California Community Colleges, was about $3 million in state funding and $10 million in federal funding. The Department of Education reports the federal government has lost more than $350 million to ghost student scams over the past five years. Now, the inspector general has launched some 200 investigations coast-to-coast.
“As they’re stealing identities, these loans are not being repaid,” Jason Williams of the U.S. Department of Education said. “They’re being assigned to people. They don’t even know they have a debt with U.S. Department of Education. Or you get some letter from the department or the servicer or the internal revenue service that says you owe the Department of Education money for something you didn’t even know about.”
Community colleges are fighting back by hiring consultants, such as Maurice Simpkins. The former NFL linebacker and his wife run a software security firm that’s now screening students as they apply to more than 150 schools nationwide.
Simpkins said, “That’s essentially the way I like to look at it. From a football term, it’s an offensive line.”
Simpkins said they’ve found digital footprints from criminal rings around the world.
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“Bangladesh, Pakistan, Nigeria. Most recently, we have been seeing some Russian data. I mean, it’s actually coming in Russian characters in some instances,” Simpkins said.
California community colleges are deploying the following tools:
- Machine learning that recognizes false applications
- Multi-factor authentication that includes selfies or live video
- Resistance to bots and automated script attacks
They are also counting on professors to catch names on their roster of students who never appear in class. Chaidez said these efforts have vastly reduced the number of ghost students who get through.
“It’s still happening, so we still remain diligent,” Chaidez said. “You know, we want to make sure that we’re serving actual students. We’re providing financial resources to actual students, not losing those resources to ghost students, to the criminal activity that still happens. And that’s why we remain diligent.”
We spoke with one professor who told us the scammers will sometimes answer an email or even complete a classroom assignment, just to keep the financial aid money flowing. And once they get it, they disappear.
Take a look at more stories by the ABC7 News I-Team.
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