Scammers are using a clever trick to steal millions of dollars in taxpayer money meant for college students. They create fake enrollments at community colleges, pretending to be real students to collect financial aid. These fake enrollees are called “ghost students” because they rarely—if ever—show up for class. A recent investigation by ABC News and reporter Dan Noyes has exposed how widespread this problem has become, especially in California.
The scam works like this: Criminals, often operating from overseas countries like Bangladesh, Pakistan, Nigeria, or even Russia, steal real people’s identities or make up fake ones. They use these to apply to community colleges, get accepted, and then request federal grants (like Pell Grants) or loans. Many of these scams target online or asynchronous classes, where students work at their own pace and there’s less chance of being noticed as absent. Scammers sometimes even respond to emails or submit simple assignments to keep the aid flowing before they disappear with the money.
In San Jose’s community college district, Chancellor Dr. Beatriz Chaidez explained the impact. In some courses, classes that should have had 50 real students plus a waiting list of over 100 turned out to have mostly fraudulent accounts. “Maybe six of those actual enrollees were students and the rest were fraudulent accounts, ghost students,” she said. This fraud takes spots away from real students who need them and drains money that could help legitimate learners pay for tuition, books, or other expenses.
The numbers are shocking. According to the California Community Colleges system, in 2024—the most recent full year with data—about 31.4% of all applications to the state’s 116 community colleges were fraudulent. That year alone, the system lost roughly $3 million in state funding and $10 million in federal funding to these scams. Nationally, the U.S. Department of Education reports that ghost student schemes have cost the federal government more than $350 million over the past five years. Officials have opened around 200 investigations across the country, and some estimates suggest the total fraud could reach into the billions when looking at patterns nationwide.
Real people get hurt too. Murat Mayor, a 58-year-old business analyst with a PhD, discovered that scammers had used his and his teenage son’s stolen identities to sign them up for classes and apply for aid all over the country. “There were a lot of applications, loan applications, grant applications,” he said. “Then we panicked.” Victims can end up with unexpected debt notices from the government or IRS for loans they never took out, damaging their credit and requiring months of paperwork to fix.
Community colleges are fighting back with new tools and strategies. They’re using machine learning to spot fake applications, adding multi-factor authentication that requires selfies or live video checks, and blocking bots and automated attacks. Some schools hire outside experts, like former NFL linebacker Maurice Simpkins, whose security firm screens applicants for more than 150 colleges nationwide. His team traces digital clues back to criminal networks around the world.
Professors also play a key role by flagging students who never appear in class or show suspicious behavior. These efforts have helped reduce the number of ghost students who succeed in getting aid. “It’s still happening, so we still remain diligent,” Chaidez said. “We want to make sure that we’re serving actual students… not losing those resources to ghost students [and] criminal activity.”
The problem highlights bigger issues in online education and financial aid systems. Easy enrollment at community colleges, meant to help everyone access higher education, has made them a target. As scammers use artificial intelligence to create more convincing fake applications faster, colleges and the government must keep improving their defenses to protect taxpayer dollars and real students’ opportunities.
This fraud isn’t just about money—it’s about fairness. Every dollar stolen from ghost students is a dollar not going to someone who truly needs help succeeding in college. Officials say the fight continues, and staying vigilant is the only way to keep the system working for those it’s designed to serve.
