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The U.S. Department of Education announced a new requirement that first‑time applicants for federal student aid present a government‑issued photo ID as part of efforts to combat a surge in AI‑driven financial aid fraud, department officials said.
Scammers are deploying AI "ghost students" — automated bots that enroll in online classes under stolen identities — to collect federal grants and loans, then vanish. In fiscal 2024, California community colleges alone logged about 1.2 million fraudulent applications and 223,000 fake enrollments, costing at least $11.1 million in unrecoverable aid, as per an analysis by the Associated Press. The ID verification rule applies to approximately 125,000 summer aid applicants, with enhanced screening scheduled for the fall.
Scammers often target asynchronous online courses. Instructors report classes filled beyond capacity with no-shows, locking out real students. At City College of San Francisco, students struggled to enroll as bots crowded rosters, an issue confirmed by faculty.
Heather Brady, 38, of San Francisco, first learned of identity theft when a police officer asked if she had applied to Arizona Western College. She had not — yet she discovered over $9,000 in loans taken in her name for a California college. "I just can't imagine how many people this is happening to that have no idea," she told AP. Brady remains in the aid grace period but delayed class registration due to inflated enrollments.
In Shreveport, La., housecleaner Brittnee Nelson paid a steep price when a scammer applied to Delgado Community College, dropping her credit score by 27 points. She avoided loan payout on one application, but a second loan for over $5,000 was disbursed. "It's like if someone came into your house and robbed you," she said.
Experts say fraud diverts critical resources from deserving students. Kim Rich, assistant dean at L.A. Pierce College, told California community college leaders that ghost‑student bots routinely push real students out of classes and aid slots.
Last month, college administrators in California decided to introduce "robust identity verification protocols" at its CCCapply application portal, which serves as the entry point for the state's community college system, annually serving two million students, many of whom are suspected to be fraud bots.
“The impact of their scams can be severe—your identity stolen, credit cards and loans taken out in your name, or your bank account zeroed out,” the Department of Education said in a recent cybersecurity bulletin warning of the scam.
How can individuals protect themselves?
- Use strong, unique passwords, especially for financial aid and school accounts, and activate two‑factor authentication.
- Never share login credentials or personal data in response to unsolicited emails or messages.
- Monitor credit reports regularly and consider placing fraud alerts or credit freezes with Equifax, Experian, or TransUnion.
- Collect your mail every day, and place a hold on your mail when you are on vacation or away from your home.
- Monitor credit reports and student loan accounts. Check details for unfamiliar disbursements or college applications.
- Maintain control of personal documents — avoid digital oversharing of Social Security numbers or birth dates.
What steps should victims take?
- Report fraud to colleges, Federal Student Aid, loan servicers, and credit bureaus.
- File an identity theft report with the FBI or FTC and request fraud alerts or credit freezes.
- Keep detailed records of calls and correspondence to expedite loan disputes or discharge processes.
The Department of Education acknowledged that staff reductions in the Office of Inspector General and Federal Student Aid office may impede response efforts. "The rate of fraud through stolen identities has reached a level that imperils the federal student aid program," the department stated in guidance to colleges.
The U.S. Department of Education has announced new identity validation measures to strengthen the integrity of the student aid system. These steps include requiring government-issued photo IDs and deploying additional digital verification tools. Officials say the changes aim to protect both taxpayers and legitimate students from increasing threats of financial aid fraud.
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https://www.lapost.com/content/woman-sentenced-to-prison-for-identity-theft
