How AI Is Helping Scammers Enrol Fake Students To Get College Funding

Heather Brady never planned to attend Arizona Western College, but still, a chatbot enrolled using her identity, drew a £9,000 student loan, and vanished, the Associated Press reported.

Police told Brady the account belonged to a network that registers ghost students, stays long enough to claim aid, then drops every class. Victims like her learn about the debt only when credit scores crash or police arrive at the door with awkward questions.

Officers see similar scams across California, where criminals took at least £11.1 million from community college budgets last year, according to the same AP investigation. Fake enrolments now crowd classrooms at a record pace.

 

How Do Bots Enrol Without Being Noticed?

 

Fraud rings gather data from leaks, craft hundreds of identities, then send automated scripts through open-access admission sites within minutes, Government Technology reported in February 2025. Each phony student triggers a separate aid application, turning the scam into mass production.

Jory Hadsell at Foothill-De Anza Community College described a three-phase pattern: submit, enrol, claim refund, then withdraw before repayment rules activate. Bots even queue on waiting lists, so when staff raise caps the seats vanish instantly.

College staff once verified names manually, but rising volumes made that impossible. Hadsell said one class reached 120 registrations, of which only 10 belonged to real learners.

Santiago Canyon’s dean lifted quotas little by little… fake accounts filled each new seat until staff ended the test, President Jeannie Kim said. The crowding left genuine students on the outside looking in.

 

Why Does The Loan Affect Real People?

 

Identity theft turns ordinary workers into apparent debtors. Many discover the damage only when credit scores crash or police arrive at the door with awkward questions.

Brady’s servicer still lists the £9,000 liability, even as she battles for removal, Associated Press wrote. The charge blocks her access to new aid while she searches for work.

Housecleaner Brittnee Nelson spent 2 years overturning £5,000 in loans that fraud criminals drew in her name for classes she never attended, the AP noted. Her credit score nearly plunged into collection territory before relief arrived.

CalMatters calculated more than £3 million in federal aid lost to fakes in the first quarter of 2025 alone, showing the pace of theft keeps climbing. Leaders fear that figure undercounts cases still hidden.

 

 

What Tools Catch The Criminals?

 

After months of manual checks, Foothill-De Anza loaded past scam data into an AI product called Lightleap. Within weeks the programme doubled early detections, Government Technology recorded.

Santiago Canyon ran the same tool and cleared 8,000 fake names, freeing seats for 7,500 real learners, President Kim said. Accuracy reached 99%, easing faculty workload.

The US Education Department added a summer rule that forces first time aid applicants to upload a government photo ID, covering roughly 125,000 students, the agency announced. Leaders promise stronger filters for autumn.

 

Could Making Watchdog Teams Smaller Make Matters Worse?

 

CalMatters uncovered that the Education Department’s Office of Inspector General has lost more than 1/5 of its investigators since October. Layoffs and retirements trimmed the staff while fraud kept rising.

State Chancellor John Hetts said, “When you direct less resources to combating fraud you’re going to get more fraud.” He called for a united database so one caught scammer cannot enrol elsewhere the next day.

Lawmakers have put in £150 million toward cybersecurity since 2022, buying services from ID.me, N2N and LexisNexis, still criminals keep adapting to these. Cyber teams refer to the contest as a neverending chase.

 

Where Does That Leave Genuine Learners?

 
Seats taken by such students delay graduation plans and can stop transfer dreams cold, as college leaders have put it. Students may pay extra terms of rent and transport while waiting for a spot.

When bots crowd an online class, real discussion dries up, leaving tutors speaking into the void. Some teachers cancel interactive tasks because nobody answers.

Leaders hope tougher ID checks and shared threat data will restore trust, but for now every application gets a second look. The same technology that steals money must police itself.