The Rise of Ghost Students: AI-Fueled Fraud in Higher Education

Colleges across the United States are facing an alarming increase in "ghost students"—fraudulent applicants who infiltrate online enrollment systems, collect financial aid, and vanish before delivering any academic engagement. The problem, fueled by advances in artificial intelligence and weaknesses in identity verification processes, is undermining trust, misdirecting resources, and placing real students at risk.

What Is a Ghost Student?

A ghost student is not simply someone who drops out. These are fully fabricated identities—sometimes based on stolen personal information, sometimes entirely synthetic—created to fraudulently enroll in colleges. Fraudsters use AI tools to generate admissions essays, forge transcripts, and even produce deepfake images and videos for identity verification.

Once enrolled, ghost students typically sign up for online courses, complete minimal coursework to stay active long enough to qualify for financial aid, and then disappear once funds are disbursed.

Scope and Impact

The scale of the problem is significant and growing:

• California community colleges flagged approximately 460,000 suspicious applications in a single year—nearly 20% of the total—resulting in more than $11 million in fraudulent aid disbursements.

• The College of Southern Nevada reported losing $7.4 million to ghost student fraud in one semester.

• At Century College in Minnesota, instructors discovered that roughly 15% of students in a single course were fake enrollees.

• California's overall community college system reported over $13 million in financial aid losses in a single year due to such schemes—a 74% increase from the previous year.

The consequences extend beyond financial loss. Course seats are blocked from legitimate students. Faculty spend hours identifying and reporting ghost students. Institutional data becomes unreliable. Most importantly, public trust in higher education systems is eroded.

Why Now?

Several developments have enabled this rise in fraud:

1. The shift to online learning during the pandemic decreased opportunities for in-person identity verification.

2. AI tools—such as large language models, AI voice generators, and synthetic video platforms—allow fraudsters to create highly convincing fake identities at scale.

3. Open-access policies at many institutions, particularly community colleges, allow applications to be submitted with minimal verification.

4. Budget cuts and staff shortages have left many colleges without the resources to identify and remove fake students in a timely manner.

How Institutions Are Responding

Colleges and universities are implementing multiple strategies to fight back:

Identity Verification Tools
Some institutions now require government-issued IDs matched with biometric verification—such as real-time selfies with liveness detection—to confirm applicants' identities.

Faculty-Led Screening
Instructors are being encouraged to require early student engagement via Zoom, video introductions, or synchronous activities to confirm that enrolled students are real individuals.

Policy and Federal Support
The U.S. Department of Education will soon require live ID verification for flagged FAFSA applicants. Some states, such as California, are considering application fees or more robust identity checks at the enrollment stage.

AI-Driven Pattern Detection
Tools like LightLeap.AI and ID.me are helping institutions track unusual behaviors such as duplicate IP addresses, linguistic patterns, and inconsistent documentation to detect fraud attempts.

Recommendations for HEIs

To mitigate the risk of ghost student infiltration, higher education institutions should:

• Implement digital identity verification systems before enrollment or aid disbursement.

• Train faculty and staff to recognize and report suspicious activity early in the semester.

• Deploy AI tools to detect patterns in application and login data.

• Foster collaboration across institutions to share data on emerging fraud trends.

• Communicate transparently with students about new verification procedures and the reasons behind them.

Why It Matters

Ghost student fraud is more than a financial threat—it is a systemic risk to educational access, operational efficiency, and institutional credibility. With AI-enabled fraud growing in sophistication, higher education must act decisively to safeguard the integrity of enrollment, instruction, and student support systems.

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Sources

• CrossHackers: https://www.crosshackers.com/fake-enrollments

• SF Chronicle: https://www.sfchronicle.com/bayarea/article/community-college-financial-aid-fraud-20325192.php

• SFGate: https://www.sfgate.com/bayarea/article/ghost-students-creating-problem-calif-colleges-20311708.php

• Eye on Yavapai College: https://www.eyeonyavapaicollege.com/administration/fraudsters-attacking-colleges-using-ghost-online-enrollment-schemes

• Star Tribune: https://www.startribune.com/ghost-students-the-new-enrollment-fraud-scheme-minnesota-two-year-colleges-are-fighting/601329524

• Campus Reform: https://www.campusreform.org/article/ghost-students-invading-campuses-scamming-millions-of-dollars-away-and-blocking-out-real-undergrads/28295

• University Business: https://universitybusiness.com/what-can-institutions-do-about-the-rise-of-ghost-students

• JD Supra: https://www.jdsupra.com/legalnews/steps-colleges-should-take-to-bust-3949980

• Get VerifiNow: https://www.getverifinow.com/the-ghost-student-problem

• Intellicheck: https://www.intellicheck.com/resource-library/the-rise-in-ghost-students-how-fraudsters-use-fake-identities