In a letter recently sent to Governor Tim Walz (D), Education Secretary Linda McMahon revealed that nearly 2,000 "ghost students" in Minnesota stole $12.5 million in taxpayer-funded grants and loans.
The fake students are financial aid applicants who "were not ID-verified and often did not live in the United States, or simply did not exist," but they "collected checks from the federal government, shared a small portion of the money with the college, and pocketed the rest—without attending the college at all."
The letter accuses Minnesota's political elite of turning a blind eye and even helping facilitate "the laundering of money that was meant to help America's least fortunate."
"Essentially, these are scammers, fraudsters using artificial intelligence bots or some other way to game the system," says Matt Lamb of The College Fix.
They register for federal student aid and enroll in a class, which allows them to access the aid. In addition to costing taxpayers millions, this frustrates actual students who are trying to enroll in classes they need but are full of ghost students.
"They're able to easily prove their attendance because it's a pretty low bar, and they simply, as far as I can tell, just need to prove that they're enrolled in a college program at an accredited school," says Lamb.
It is obvious to him that Minnesota and other states like California need new safeguards, and he suggests the simplest way to crack down on this is to require "face-to-face verification that a student actually exists."
"Colleges could easily crack down on this by simply referring students when they enroll for the first time to have some sort of face-to-face interaction," Lamb submits.
He recognizes, though, that colleges "don't have the best incentives to crack down on fraud because they're getting money from this."
To address that, some sort of financial penalty for colleges that benefit, even unwittingly from the fraud, may be necessary.
