US EditionScammers Are Using AI to Enroll Fake Students in Online Classes, Then Steal Financial Aid
- On a Sunday afternoon in San Francisco, Heather Brady discovered that scammers used her identity to enroll her in California colleges and steal over $9,000 in federal loans.
- This fraud surge follows the rise of artificial intelligence tools and online class popularity, leading to over 1.2 million fraudulent college applications reported in California in 2024.
- In June 2025, the U.S. Education Department implemented a short-term policy requiring first-time federal aid applicants to verify their identity with government-issued identification to address increasing incidents of identity theft.
- Last year, over $11 million in financial aid was fraudulently obtained from California community colleges, forcing victims to endure prolonged efforts contacting institutions and loan servicers, while cuts to agency staff hinder fraud investigations.
- This ongoing fraud threatens federal student aid programs, suggesting that stricter identity verification and reconstruction of enforcement efforts may be needed to protect borrowers and taxpayers.
39 Articles
39 Articles
Billions of people around the world are suffering from this.
Financial fraud is ravaging U.S. colleges thanks to scammers using AI
It was an unusual question coming from a police officer. Heather Brady was napping at home in San Francisco on a Sunday afternoon when the officer knocked on her door to ask: Had she applied to Arizona Western College?
Waterloo Cedar Falls Courier
Scammers are using AI to enroll fake students in online classes, then steal financial aid
Financial aid fraud is exploding, thanks to the rise of artificial intelligence.
Unmasking a new threat: AI chatbots are behind a massive financial aid scam targeting colleges.
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Colleges Support Student Financial Literacy Education
Colleges are learning that financial wellness can impact student retention and educating students on money management and loan repayment can enhance their success. Students often consider the return on investment of their degree when deciding whether and where to enroll in college, but not every student receives financial education from their institution on how to turn a college education into a life-sustaining career.
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