This is probably happening in almost every state. Imagine the losses.
The College Fix reports:
Utah colleges lost $834,000 to ‘ghost student’ enrollment fraud: reportUtah’s higher education system lost over $830,000 in recent years to “ghost students” who apply only to receive financial aid and run off with the money without pursuing a degree.“Institutions reported disbursing $834k to suspected fraudulent applicants and spending over 15,000 hours working to mitigate enrollment fraud,” according to the Utah Legislative Auditor General’s 2026 Performance Audit on Enrollment Fraud in Higher Education.Salt Lake Community College alone saw at least 2,000 fraudulent applications in recent years.The report also states that “Limited information sharing and the absence of formal system-level response hindered detection of fraudulent activity.”Nick Varney, senior audit and operations supervisor in the Utah State Legislature, told The College Fix via email that fraudsters enroll in virtual classes and then, “maybe complete some introductory coursework, probably using artificial intelligence.”
“And then the moment that the aid is dispersed, then you see the student drop off,” he said, adding that Utah saw a rise in ghost student applications in 2025 and 2026.
Varney also said that the average person, including university students themselves, don’t seem aware of this issue.Asked about what can be done to mitigate this problem, Varney highlighted two solutions that have worked well for Utah State University.When USU saw a rise in applications on a certain weekend, it “immediately shut down the application.”“They shut down their system, they met with their leadership and got everyone on board to understand what the problem was and what solutions and what internal controls were gonna be needed in order to have more robust processes to ensure that fraudulent applications weren’t getting through,” he said.
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