February 11, 2026
The U.S. Department of Education’s Office of Inspector General has more than 200 investigations open across the country as some schemes are suspected of stealing over a billion dollars.
College students, there’s a new group of scammers called “ghost students” who are creating fake identities or stealing others to enroll in colleges and universities and taking off with millions in financial aid assistance, ABC News reports.
Following the COVID-19 pandemic, scammers took advantage of remote learning settings within higher learning and leveraged A.I. to increase their tactics in identity theft, targeting financial aid and Pell grants. Artificial intelligence allowed them to expand their reach and circumvent identity verification controls. Almost overnight, the scam grew.
“Ghost students” got the name as once they receive the funds, the scammers disappear, robbing deserving students of the opportunity for an education and stealing hundreds of millions of dollars from the federal government.
Jason Williams, the assistant inspector general for investigations for the U.S. Department of Education’s Office of Inspector General, called it “a huge issue” but nothing new. “As they’re stealing identities … these loans are not being repaid. They’re being assigned to people [who] don’t even know they have a debt with the U.S. Department of Education … [until] the Internal Revenue Service says you owe the Department of Education money,” Williams said, pushing that fraudsters have made attempts to steal student financial aid for decades.
“But when the pandemic [hit], everybody went to online learning. Well, by doing that, it really did open the door.”
His office has more than 200 investigations open across the country, as some schemes are suspected of stealing over a billion dollars.
According to AL.com, community colleges in California, Michigan, Minnesota, Oregon, and New Jersey are key targets. One high school student was excited to continue his education and applied for student loans, but was labeled as ineligible. Shortly after, the student realized his identity was stolen and used to apply for several schools.
While the “ghost” scammers from overseas can be challenging to detect, a majority come from within the U.S. A father and son scammer duo from Arizona took more than $7 million, but after authorities caught up with them in 2018 and 2019, both pleaded guilty and served 12 months. Another man from Maryland stole the identities of 60 people, stealing over $6.7 million in financial aid, resulting in him serving four years in prison.
However, the federal government is working with certain software to protect students and stop the scammers.
Former NFL linebacker Maurice Simpkins owns one of software companies. Student Application Fraudulent Examination, also known as S.A.F.E. works as a firewall or “an offensive line” for the schools, catching roughly 95% of fake applications. Arapahoe Community College in Colorado and 100 more schools work with S.A.F.E. as clients.
To date, Simpkins says one of the worst instances came when a school identified that almost one-third of the enrolled students were frauds.
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