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.
In short
- Five people face charges over alleged student aid fraud.
- More than 830,000 accounts were flagged as potentially fraudulent.
- Stolen identities could leave victims facing debt and credit damage.
Explained simply
In the US, federal student aid helps eligible students pay for college, and people apply using the Free Application for Federal Student Aid, or FAFSA. Colleges use those applications to assess aid, which can include loans that students are expected to repay.
The case centres on allegations that people used stolen personal details to apply for aid and enrol at colleges in the names of people who were not actually studying. Officials say artificial intelligence helped produce coursework and make it appear that the named students were attending, while aid refunds went to the alleged organisers or people moving money for them.
The Justice Department has charged five people and says the investigation has identified more than 830,000 potentially fraudulent aid accounts. The scale matters because the figures could represent substantial losses to a public programme, though officials say not all the accounts have been confirmed as fraudulent.
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