Cybercrooks are exploiting yet another AI tactic to siphon millions from the higher education system through a new breed of sophisticated scams. In this latest AI-powered heist, scammers impersonate students and enroll them in online courses to collect financial aid.
TechSpot reports that cybercriminals are using AI-powered bots to impersonate students, enroll them in online college courses, and divert their financial aid, leaving real individuals with stolen identities and fraudulent debt. These so-called “ghost students” can complete applications, enroll in classes, participate in coursework, and even submit assignments without any human involvement. In some cases, instructors have discovered that nearly all of their students are fake, with legitimate learners locked out of required classes due to bots filling up the available slots.
The financial impact of this scam is substantial, particularly for community colleges, where lower tuition means a larger portion of grant and loan funds goes directly to students for living expenses. In 2024, California’s community colleges reported 1.2 million suspicious applications, leading to over 220,000 likely fraudulent enrollments, according to data obtained by the Associated Press. The system lost at least $11.1 million in unrecoverable financial aid in that year alone.
Victims of these scams face a long and frustrating process to unravel the damage. Heather Brady, a San Francisco resident, discovered that someone had used her personal information to secure government aid and enroll her in a college in Arizona without her knowledge. She later found out that a student loan for more than $9,000 had been issued in her name for classes she never attended. Similarly, Brittnee Nelson, a small business owner in Louisiana, spent two years working to remove fraudulent debt from loans taken out in her name for schools she never attended, despite diligently monitoring her credit and safeguarding her identity.
Colleges often claim that they lack the power to prevent these scams, with the ultimate authority for loan approval lying with federal agencies, but this doesn’t let them off the hook for registering bots for classes that real students need to complete their degrees. In response to the surge in fraud, the US Department of Education recently implemented a temporary measure requiring first-time federal aid applicants to verify their identity with a government-issued ID. The department acknowledged the severity of the threat, stating, “The rate of fraud through stolen identities has reached a level that imperils the federal student aid program.” More robust screening is expected to follow.
Read more at TechSpot here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship.
