EDITOR’S NOTE: This story was produced in collaboration with our partners at ABC News.
LITTLETON, Colo. — After the COVID-19 pandemic led to more online learning, community colleges and other higher learning centers have had to deal with a new phenomenon that’s hard to see: "ghost students."
"Ghost students" are scammers who create fake identities or steal someone else’s to enroll in school, apply for federal financial aid and make off with the money, costing taxpayers millions of dollars.
An ABC News investigation found that colleges across the country – particularly community colleges due to open admissions – are now spending time and resources trying to find these "ghost students" and stop them before they get loans.
In Colorado, Lisa Matye Edwards, vice president of admissions for Arapahoe Community College, said the issue has been a major concern in recent years.
“There's just somebody on the roster, but I never see them. I never necessarily hear something live from them, but I might get some kind of work sometimes turned in,” Matye Edwards said.
She recalled one weekend where the school had more than 900 applications from people all appearing to live within a five-mile radius of the school.
And while the concept isn’t necessarily new, it has evolved and grown. Some scammers are accused of joining calls over Zoom and holding up fake ID cards in order to appear as if they are taking the class. Some even use artificial intelligence to create a fake persona and do some of the workload for classes.
Jason Williams, federal investigator with the U.S. Department of Education, said in some of these schemes, the fake students will be enrolled in multiple schools at the same time and receive financial aid from all of them.
“Right now, we have about 200 investigations open nationwide,” he told ABC News reporter Steve Osunsami.
The use of AI is a huge factor in these investigations, Williams said. And it’s something that Matye Edwards said she didn’t expect when first hearing of artificial intelligence.
“You always want to imagine the good use of it,” she said. “And eventually you get cynical, you know, that it's going to be used to try to fraudulently try to do something.”
Data on how many "ghost students" have been detected can be hard to find. The Colorado Department of Higher Education does not track it, but Williams said the U.S. Department of Higher Education has investigated more than $350 million in fraud related to "ghost students."
Other colleges, such as Community College of Denver, have had issues with this as well. Even some four-year colleges, such as Metropolitan State University of Denver, have had to take action to try and prevent scammers from getting financial aid, which impacts the people who legitimately need the money.
“The people who actually do need that access to those dollars — it becomes a much more burdensome process,” Matye Edwards said.
New ways to fight the problem
Maurice Simpkins, former NFL player, is one person making an attempt to stop this fraud. He now runs a softcare company called S.A.F.E., or Student Application Fraud Examination.
Right now, it’s used by more than 100 schools to identify applicants who might be fake.
He said the worst situation he’s seen was a school where roughly one-third of the enrolled students were fraudulent. Most of them hail from other countries.
“A loan of $10,000, right? But multiply that times 10, it's obviously profitable,” Simpkins told ABC News.
Arapahoe Community College is using S.A.F.E. as a pilot program as the Colorado Community College System considers using it statewide.
“Actually, we're going to run all of our applicants through it and it's going to say, 'Hey, some of these applicants need a closer look,'” Matye Edwards said.
Other programs, such as VerifiNow Inc., can also be helpful in identifying ghost students. It’s also used in other fields, such as health, to detect fraud.
“It's a global problem. It's not just the U.S.,” said Paul Velusamy, founder and CEO of VerifiNow, Inc. “If you look at higher education, most of the schools, they're looking at a few million dollars-plus in losses or fraudulent admissions.”
Velusamy said one check can take roughly 20 seconds and that approximately 3% of their checks have uncovered a fake ID card.
Watch Denver7 Investigates' interview with VerifiNow Inc. in the video below.
And while schools are now taking a closer look, everyday people also need to be aware to make sure their identities aren’t used to take out these loans.
“Pay attention to those credit reports and those fraud reports,” Matye Edwards said. “If you get contact from a school saying something like they think you're enrolled, that's good to follow up if you're not.”
ABC News reporter Steve Osunsami and producers Lucien Bruggeman and Emily Kohlberg contributed to this report.
