Millions in Financial Aid Fraud Discovered in California’s Community College System

Millions in Financial Aid Fraud Discovered in California’s Community College System

This clearly needs more media attention and more investigations.

This is startling: About 34% of applicants to California's Community College system were likely fake in the last calendar year, and have been scamming millions of dollars in state and federal financial aid. https://t.co/8BsiOeXtb9

— Emily Hoeven (@emily_hoeven) April 8, 2025

From Cal Matters:

Fake student aid: California colleges detect more fraudsters stealing millions

For years, scammers have targeted community colleges across the state, posing as students in order to steal money from scholarships or government financial aid.

Recent state reports suggest the problem is getting worse, and college leaders say they’re worried that the Trump administration’s cuts to the U.S. Department of Education could hamper fraud prevention and investigations.

In 2021, the California Community Colleges Chancellor’s Office reported that about 20% of college applicants were likely fake. In January 2024, the state said it was up to about 25%.

Now it’s around 34%, according to the most recent data from the last calendar year. “Those are all the ones that are stopped,” said John Hetts, executive vice chancellor for the data team at the chancellor’s office.

The scammers that aren’t stopped have stolen millions in taxpayer dollars. CalMatters reported that these fake students received more than $5 million from the federal government and nearly $1.5 million from the state, according to anonymized reports that colleges submitted to the state from September 2021 through December 2023.

Faculty say they’re exasperated from working as detectives, trying to suss out which students are real. They say scammers are increasingly relying on artificial intelligence to infiltrate classes, using tools like ChatGPT to pose as students. Students say these fraudsters are taking coveted seats and preventing them from enrolling in classes they need to graduate.

In the last 12 months, colleges reported giving more than $10 million in federal dollars to fake students and over $3 million in state money. Data from the first few months of 2025 show that colleges have already given away more than $3 million in federal aid and over $700,000 in state dollars.

The scope of fraud is “relatively small,” said Chris Ferguson, a finance executive at the chancellor’s office, especially when compared to the roughly $1.7 billion in federal aid and $1.5 billion in state aid given to California’s community college students last year. He also said it’s likely that colleges have improved their ability to detect fraud over time, potentially inflating the reporting numbers.

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