“Ghost students” are fictitious or stolen identities used by criminal organizations to enroll in online college courses for the purpose of committing financial aid fraud. Using bots and artificial intelligence, fraudsters can flood schools with thousands of applications in minutes, particularly at community colleges with fewer application requirements.
This problem became more pronounced during the COVID-19 pandemic, with the rise of online classes making it easier to enroll without needing to appear in person.
How the scam works
Application and enrollment: Fraudsters use a fake or stolen identity to submit an online application to a college. Once accepted, they enroll the “ghost student” in classes.
Maintaining active status: To avoid being dropped from courses, scammers may submit AI-generated homework or engage minimally in class to maintain the appearance of an active student.
Financial aid theft: The main goal is to use the fake student’s enrollment status to apply for and steal federal and state financial aid, including grants and student loans.
Covert activities: The scam can also involve other activities that provide access to university resources, such as using the .edu email address for phishing scams or to receive student discounts.
Consequences of ghost student fraud
Financial losses: The scam costs educational institutions and taxpayers millions of dollars annually. The U.S. Department of Education identified $90 million in federal student aid that went to ineligible, often fraudulent, students.
Wasted resources: The criminal networks take up limited seats in classes, blocking legitimate students from enrolling in courses they need to graduate.
Increased waiting lists: Fake enrollments create artificially long waiting lists for courses, leading to delays and frustration for real students.
Administrative burden: Colleges and universities must divert significant resources to investigate fraudulent applications and enrollments.
Countermeasures and examples
Increased security measures: In response to the growing threat, the Department of Education required new identity verification steps for the Fall 2025 school year.
Use of AI to fight AI: Some college systems, like the California Community College system, are deploying AI software to detect fraudulent enrollments at scale.
Manual review: Some smaller colleges that haven’t been heavily targeted, like Bay de Noc Community College in Michigan, are using more manual application reviews as a preventative measure.
Historical examples: The fraud is not entirely new. In a 2025 interview, an official described a case where a former financial aid advisor fraudulently enrolled more than 60 people and stole $5.6 million in federal student loans over a period from 2012 to 2017.
