According to a recent report from the Utah legislative auditor general, the state’s higher education system lost over $830,000 in recent years to “ghost students” who apply 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,” the 2026 Performance Audit on Enrollment Fraud in Higher Education report noted.
Salt Lake Community College alone saw at least 2,000 fraudulent applications in recent years, the report highlighted.
The community college did not respond to the Daily Signal’s request for comment.
The report also states that “limited information sharing and the absence of a formal system-level response hindered detection of fraudulent activity.”
Nick Varney, senior audit and operations supervisor for the Utah Legislature, told The College Fix 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, doesn’t seem aware of this issue.
Asked about what can be done to mitigate the problem, Varney highlighted two solutions that have worked well for Utah State University. When officials saw a rise in applications on a certain weekend, they “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 going to be needed in order to have more robust processes to ensure that fraudulent applications weren’t getting through,” he said.
Second, Varney said institutions of higher education need to collaborate with each other. With “more eyes” on the issue, universities can share strategies and raise “awareness of the different tactics that fraudsters are using.”
The issue isn’t limited to Utah.
Corey DeAngelis, a research fellow at The Heritage Foundation, told The College Fix that this problem is growing nationally.
“In California, reports have shown that roughly one in three community college applications in recent years were fraudulent, resulting in tens of millions of dollars in lost federal and state aid,” he said.
He added that the U.S. Department of Education has uncovered hundreds of millions of dollars in fraudulent financial aid payouts in recent years.
In a single year, $150 million was given to ineligible students. Tens of millions of those funds went to “deceased individuals’ identities,” he said.
The pandemic caused a rise in fraudulent applications since more enrollment was moved online and sophisticated identity-theft rings used stolen or synthetic identities.
Using better screening methods, the department blocked almost $2 billion in suspected fraud since the pandemic, “but the scale of attempted abuse remains enormous,” he said.
“Title IV programs are built on a foundation of institutional self-certification and relatively light upfront verification,” he said, adding that fraudsters use fake identities. They “trigger” aid disbursements and often disappear without notice.
“Institutions then have to repay the federal government, wasting staff time and taxpayer dollars while real students get waitlisted for classes taken by ghosts,” DeAngelis said.
Key weaknesses in school application systems include poor identity verification, aid given upon enrollment instead of verified attendance, privacy rules that hinder the sharing of fraudulent identity information, and “perverse incentives” of schools that benefit from enrollment numbers.
The education policy expert suggested establishing “stronger guardrails without creating new bureaucratic hurdles for legitimate students.”
“This fraud hurts taxpayers and crowds out legitimate students. Recent federal efforts to crack down are positive and long overdue. We should build on that momentum with commonsense reforms that protect the integrity of student aid while keeping the door open for real learners,” DeAngelis told The College Fix.
At the federal level, Education Secretary Lisa McMahon and the House Committee on Education and the Workforce have been working to crack down on the ongoing issue of ghost students in higher education.
“This issue isn’t hypothetical; it’s happening every day across the nation and taxpayers are losing millions because of it,” a committee spokesperson told the Daily Signal. “The committee has been leading the charge on this issue, and just last month, the House passed H.R. 7892 to strengthen oversight and ensure federal student aid supports real students.”
In a statement released last month, McMahon wrote that “the previous Administration turned off nearly every single fraud prevention measure, allowing billions of taxpayer dollars to be stolen by ‘ghost students’ and other criminals.”
However, she added that “since day one, the Trump administration has been committed to restoring existing fraud detection capabilities while building the most comprehensive fraud-detection system in the Department’s history.”
McMahon’s statements came after the House passed the No Aid for Ghost Students Act to “cement” the administration’s ongoing efforts to eliminate fraud, waste, and abuse by requiring screening for suspicious federal student aid applications.
Continue reading...
[ H/T The Daily Signal ]
