Across the United States' community colleges and universities, sophisticated criminal networks are using AI to deploy thousands of "synthetic" or "ghost" students—sometimes in the dead of night—to attack colleges.
The hordes are cramming themselves into registration portals to enroll and illegally apply for financial aid. The ghost students then occupy seats meant for real students—and have even resorted to handing in homework just to hold out long enough to siphon millions in financial aid before disappearing.
The scope of the ghost-student plague is staggering. Jordan Burris, vice president at identity-verification firm Socure and former chief of staff in the White House’s Office of the Federal Chief Information Officer, told Fortune more than half the students registering for classes at some schools have been found to be illegitimate. Among Socure’s client base, between 20% to 60 percent of student applicants are ghosts.
"Imagine a world where 20 percent of the student population are fraudulent," said Burris. "That’s the reality of the scale."
At one college, more than 400 different financial-aid applications could be tracked back to a handful of recycled phone numbers. "It was a digital poltergeist effectively haunting the school’s enrollment system," said Burris.
The scheme has also proved incredibly lucrative. According to a Department of Education advisory, about US$ 90 million in aid was doled out to ineligible students, the DOE analysis revealed, and some US$ 30 million was traced to dead people whose identities were used to enroll in classes.
The issue has become so dire that the DOE announced this month it had found nearly 150,000 suspect identities in federal student-aid forms and is now requiring higher-ed institutions to validate the identities of first-time applicants for Free Application for Federal Student Aid (FAFSA) forms.
"Every dollar stolen by a ghost is a dollar denied to a real student attempting to change their life," Burris explained. "That’s a misallocation of public capital we really can’t afford."
Maurice Simpkins, president and cofounder of AMSimpkins, says he has identified international fraud rings operating out of Japan, Vietnam, Bangladesh, Pakistan, and Nairobi that have repeatedly targeted U.S. colleges.
The attacks specifically zero in on coursework that maximizes financial-aid eligibility, said Mike McCandless, vice president of student services at Merced College. Social sciences and online-only classes with large numbers of students that allow for as many credits or units as possible are often choice picks, he said.
For the spring semester, Merced booted about half of the 15,000 initial registrations that were fraudulent. Among the next tranche of about 7,500, some 20 percent were caught and removed from classes, freeing up space for real students.
In addition to financial theft, the ghost student epidemic is causing real students to get locked out of classes they need to graduate. Oftentimes, students have planned their work or childcare schedule around classes they intend to take—and getting locked out has led to a cascade of impediments.
According to the DOE, the rate of financial fraud through stolen identities has reached a level that "imperils the federal student assistance programs under Title IV of the Higher Education Act." In a statement, Secretary of Education Linda McMahon said the new temporary fix will help prevent identity theft fraud.
"When rampant fraud is taking aid away from eligible students, disrupting the operations of colleges, and ripping off taxpayers, we have a responsibility to act," said McMahon.
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