Thousands of “ghost students” use AI to steal millions in student loans, DOJ says

The US Department of Justice has charged five people in what it describes as a large-scale scheme using stolen identities to obtain federal student aid. Officials say the alleged fraud relied partly on artificial intelligence, and the case marks the first broad federal crackdown on so-called “ghost students”.

The scheme allegedly used personal data, often belonging to people who went straight from high school into work, to submit FAFSA applications and enrol at colleges. AI was used to complete coursework and imitate attendance, while refunds were directed to fraudsters or money mules. Officials identified more than 830,000 potentially fraudulent aid accounts; losses could approach $130 million if all are fraudulent. More than $32 million in losses are tied to the charged individuals, and cryptocurrency worth over $750,000 was seized.