By Megan Sayles
AFRO Staff Writer
msayles@afro.com
A recent state audit of Baltimore City Community College (BCCC) underscores a growing threat facing colleges and universities nationwide: the use of artificial intelligence (AI) to carry out financial aid fraud.
The audit found that BCCC awarded roughly $264,000 in financial aid to 145 suspected fictitious, or “ghost,” students. But the Baltimore institution is far from alone. Colleges across the country—particularly those with online programs—have reported schemes in which fraudsters use AI-powered bots that mass-apply for enrollment, create stolen or synthetic identities and submit fake assignments to pose as legitimate students. The goal is to remain enrolled long enough to receive financial aid refunds.
Jason Williams, assistant inspector general for investigation services within the U.S. Department of Education’s Office of Inspector General, said these schemes escalated during the COVID-19 pandemic.
“As the pandemic started and everybody moved to online learning because they couldn’t be in an in-person environment, we saw an exponential increase in the amount of ghost students and people using stolen identities to attend school,” said Williams. “When you have these virtual environments, it breeds this kind of activity because we don’t know who the person is on the other end of this computer.”
With the rise of AI tools, Williams says these schemes are becoming more persistent and harder to detect.
“It’s not just enrolling for a semester and then disappearing,” said Williams. “Now, they’re enrolling for years at a time, and, in some cases, earning a credential or bachelor’s degree before continuing on to graduate school.”
The state audit of BCCC, released on May 29, found that the school did not take “appropriate action,” after identifying suspected ghost students and, in some cases, awarded and disbursed federal financial aid without completing required verification checks.
Beginning in May 2024, BCCC flagged 4,394 student accounts for suspicious enrollment patterns—including individuals registered for the same courses multiple times, enrolling in classes without meeting prerequisites or showing no prior testing history. While these accounts were identified for further review, the audit found the flags did not prevent financial aid from being processed or disbursed in certain cases.
BCCC told the AFRO it has already begun implementing corrective actions to address the audit’s finding, including restructuring internal financial controls and enrollment verification procedures and investing in targeted staff training.
“The college takes its role as a steward of public funds and community trust with the utmost seriousness, and we fully accept the accountability required to address the report’s 16 findings, including the six repeat findings,” said BCCC in a July 2 statement to the AFRO. “BCCC views this comprehensive audit not just as compliance evaluation, but as a critical blueprint to strengthen our operational, financial and administrative frameworks under legislative realignment.”
As these schemes continue to evolve, Williams advised that higher education institutions take time to verify the identities of students, especially those enrolled in virtual classes. He also recommended that colleges closely monitor enrollment patterns for irregularities such as unusual spikes in applications, mismatched IP addresses, or repeated course registrations that do not align with academic requirements.
“It’s a huge burden for institutions to sift through who’s real and who’s not. At the end of the day, no matter how robust these systems are, fraudsters are very smart,” said Williams. “They will still try to find a way to infiltrate these systems so they can continue to defraud.”
If an individual encounters or suspects fraud, waste abuse or mismanagement involving funds from the U.S. Department of Education, they can call the Office of the Inspector General Hotline at 1-800-647-8733.
