Identity fraud isn’t relegated to any particular industry – in fact, as multiple sources can attest, identity fraud is unfortunately flourishing everywhere. Yet each industry has its own unique vectors and challenges. The education sector isn’t any different. In recent years, higher education institutions have faced a growing fraud challenge: the “ghost student” epidemic. The trend is alarming, worrying education leaders about its potential impacts regarding institutional reputation, academic integrity, enrollment management, financial aid distribution, and more. Understanding this form of identity fraud is crucial to safeguarding resources.
What Is the Ghost Student Epidemic?
Ghost students aren’t real students. Instead, ghost students are fictitious identities created and enrolled at educational institutions to exploit resources such as financial aid, grants, or scholarships. Fraudsters use stolen or fabricated identities to apply and then enroll in online or in-person programs. But once they enroll, they stop behaving like a normal student. The bad actor can access tools the school provides, like cloud storage or VPN and .edu email addresses to help them activate other scams. They can also use their status to apply and access thousands of dollars in student financial assistance funds like federal Pell Grants, and then disappear without fulfilling the academic requirements.
Ghost students often exploit loopholes in online and distance learning programs, where face-to-face interaction is minimal, and identity verification procedures may be less stringent. In fact, community colleges, with simpler application and enrollment processes, are often more susceptible to these scams. This fraud not only drains resources but also undermines the trust in systems designed to support genuine learners. Ghost students can take class spots from legitimate students while never intending to go to any classes.
These fraudulent activities can cause severe financial losses and complicate compliance with federal and state regulations.
How Ghost Student Scams Are Hurting Schools
The ghost student epidemic has significantly impacted higher education institutions, with several notable cases highlighting the severity of this issue:
- Prince George’s Community College, Maryland: Bad actors submitted 80 fake applications in a single day in 2024, averaging one every seven minutes over a couple of hours. A college representative noted that such fraudulent admissions applications have become routine.
- Pierce College, California: After identifying and removing ghost students from the rolls, the college experienced a 36% drop in student numbers, decreasing from 7,658 to 4,937. Fraudulent enrollments can artificially inflate student numbers, affecting resource allocation and class availability. Even worse, detecting them often requires extensive manual labor.
- Iowa Western Community College: The institution detected and stopped 109 ghost students attempting to scam financial aid systems after professors suspected unusual behavior.
Theses schools aren’t alone in fighting this ghost student epidemic; but detecting and stopping these attempts often remains difficult. Higher education institutions especially face a challenging issue with IT and administrative staffing gaps and often have identity management platform gaps, and/or cybersecurity platforms that are not equipped to prevent this scam.
Other Identity Fraud Issues in Higher Education
The ghost student epidemic is just one manifestation of identity fraud in the education sector. Other prevalent issues include:
- Impersonation During Exams: Fraudsters may hire individuals to take exams or complete assignments on behalf of enrolled students, undermining academic integrity.
- Admissions Fraud: Applicants may falsify transcripts, test scores, or recommendation letters to gain admission to prestigious programs, misrepresenting their qualifications.
- Employment Credential Fraud: Graduates—or those posing as graduates—may fabricate degrees or credentials from an institution, tarnishing the institution’s reputation.
- Scholarship and Grant Fraud: Fraudsters may manipulate application processes to access funds intended for deserving students, diverting resources from legitimate recipients.
Why Higher Education Institutions Should Act
Identity fraud scams, other scams, and ghost student scams can have significant repercussions for higher education if they fail to address them:
- Financial Losses: Fraudulent claims on financial aid or scholarships deplete limited institutional resources.
- Reputation Damage: Incidents of fraud can erode trust among students, parents, donors, and regulators.
- Compliance Risks: Institutions may face regulatory scrutiny and penalties for failing to implement adequate fraud prevention measures.
- Academic Integrity Concerns: Fraud undermines the value of degrees and qualifications, impacting alumni and current students.
The Role of Cutting-Edge Identity Verification Solutions
Institutions facing this fraud want to limit its impact without making access to higher education cumbersome or out of reach for pools of potential students. That’s why higher education institutions must adopt advanced identity verification technologies to combat identity fraud. Here’s why:
- Enhanced Accuracy: Modern identity verification tools use cutting-edge tools like biometric authentication, AI-driven analysis, and real-time data validation to confirm identities with a high degree of precision.
- Scalability: These solutions can seamlessly integrate with existing systems, accommodating the large and diverse student populations of universities and colleges.
- Fraud Prevention: By verifying identities at every critical touchpoint—application, enrollment, financial aid distribution, and assessment—institutions can deter sophisticated bad actors.
- Regulatory Compliance: Advanced solutions help institutions meet legal and regulatory requirements, reducing liability.
- Improved User Experience: Sophisticated identity verification processes are designed to be user-friendly, ensuring minimal disruption for genuine students while maintaining robust fraud prevention measures.
Taking the Next Step
Addressing the ghost student epidemic and other forms of identity fraud requires proactive leadership. By investing in next-gen identity verification technologies and establishing stringent fraud detection policies, higher education institutions can protect their resources, reputation, and the integrity of their academic programs.
For leaders in higher education, the time to act is now. The stakes are too high to ignore, and the tools to address these challenges are readily available. By prioritizing identity security, institutions can ensure they remain bastions of trust, equity, and excellence in education.
If you’re ready to explore holistic identity verification solutions and best practices for implementation, reach out to our experts for tailored advice, recommendations, and a demo.