‘Ghost students’ stealing millions in college financial aid

PHILADELPHIA (WPVI) — Scammers are stealing tens of millions of dollars in college financial aid.

They’re increasingly using artificial intelligence and forcing colleges and the U.S. Department of Education to bolster their fraud detection systems.

The criminals create what are called “ghost students” to steal taxpayer money. They prey largely on community colleges due to their open enrollment. As higher education rushed to establish online enrollment, it exposed vulnerabilities.

“It really does make you pause and say, ‘OK, there is a real problem here, and we need to do something about it,'” said Gina Macklin, the vice president of recruitment and admissions at Delaware County Community College.

She said more than 500 ghost students enrolled in her college in 2023.

“Have you been able to quantify how much money was stolen from the U.S. government in 2023 from those 500 applicants?” asked Chad Pradelli.

“No, I’ll say this, I’m not at liberty to say,” she replied.

Here’s how the scheme goes down: scammers begin with stolen social security numbers and other identifying information to create synthetic identities. It is a blend between real and fabricated personal details.

They then submit applications to enroll in minimal online classes and then apply for a loan and grant money, which is sent to bank accounts controlled by the scammers.

“You’re stealing money from students that could actually use this money,” said Dr. Raye Thompson from the Community College of Philadelphia. “What’s more, you’re stealing someone’s identity.”

And taking away class spots from legitimate students.

In 2025, the Community College of Philadelphia said it had more than 600 fraudulent applications, which is roughly 5% of all applicants.

The school had to pay back the U.S. Department of Education more than $600,000 it unknowingly doled out to ghost students.

“We’re in a space that we don’t know who to trust, and we have a duty,” said U.S. Dept. of Education Undersecretary Nicholas Kent. “We went from verifying approximately 30% of potential borrowers down to 1%.”

Kent told the Action News Investigative Team that fraud prevention has been a focus, and it prevented a billion dollars in fraudulent student loan payments in 2025. He said it was largely due to improving its system to flag suspicious applications on the Free Application for Federal Student Aid, also known as FAFSA.

The department also began alerting schools to verify certain applicants in person or virtually.

“Why isn’t the federal government not using the ID verification at that point?” asked Pradelli.

“I think that’s a great question,” replied Kent. “But we are working on, you know, a formula that will be integrated into the FAFSA early next year.

Delaware County Community College said it had just two ‘ghost students’ in 2025.

Former NFL player, Andrew Simpkins, and his company, help schools across the country spot ghost students using proprietary software well before they apply for federal aid.

“Some of it is bots, some of it is actually concerted people. Some of them do this as their job,” said Simpkins.

Simpkins said the program analyzes vast datasets and behavioral patterns and identifies anomalies that humans might miss.

“Within 10 seconds, we’re giving them back a response to say, ‘Hey, this person is good. Get them enrolled,” he added.

But such programs can be costly for small community colleges.

The Community College of Philadelphia said it is now monitoring IP addresses and physical addresses for applicants. It also now uses a third-party vendor, which makes sure high school transcripts are real.