Officials at California community colleges are trying to resolve a severe situation that involves hundreds of thousands of fraudulent students and significant losses in financial aid.
With a $10 fee, this multimillion-dollar issue might be partially resolved.
The idea to charge prospective students a $10 application fee was addressed by the Board of Governors of the California Community schools during a meeting last month. Historically, admission to one of the state’s 116 community schools has been free.
The allegation is just another tool for authorities to pick out people who are abusing the system to steal millions of dollars in financial aid funds as they get ready to implement fraud prevention measures. There was a long and heated discussion at the May 20 meeting over the idea to investigate the establishment of a modest application fee. Some people were concerned that the price would be perceived as a barrier for prospective students, many of whom are low-income.
However, the allegation, which would be a significant departure from the system’s open-access paradigm, is being considered by the chancellor’s office due to the magnitude and seriousness of the fraud.
How are fraudsters scamming the system?
Thirty-one percent of applicants to state community colleges between January and December 2024 were found to be probably fraudulent. According to figures from the college system’s office of the chancellor, that amounts to almost 1.2 million applications.
A California community college admits anyone who applies. Scammers take advantage of these vulnerabilities to profit from state and federal financial aid because of this accessibility as well as the rise in remote and hybrid learning forms since the COVID-19 epidemic.
Fraudsters pose as dozens or even hundreds of students using artificial intelligence, bots, and stolen identities. They enroll in classes and stay enrolled until they get their checks for financial aid. Fake students frequently occupy the few available spaces in classes that real students must attend, which causes problems for both students and faculty.
Low-income community college students in California pay little or no tuition, so even while any financial help goes toward tuition first, they still receive money to use for books, housing, food, and other necessities while they are enrolled.
According to federal agents, some scammers have used that money for luxury bags, lavish vacations, and plastic surgery.
How much aid is going to fake students?
In recent years, fraudulent enrollment and applications have steadily increased in the state’s community colleges. The Times stated in 2022 that 20% of current traffic on the primary online application site was malicious and bot-related. This means that, in less than three years, the percentage of malicious and bot-related traffic increased by more than 10% by early 2025.
California
Authorities and employees of community colleges in California have discovered what is thought to be one of the biggest attempts at college financial aid fraud in the state.
According to John Hetts, executive vice chancellor for research, analytics, and statistics for California Community Colleges, 31% of applications were judged probable fraudulent last year, but that does not imply that 31% of students in the community college system are fraudulent.
Earlier in the year, Hetts told The Times that those bogus applications were identified and removed from the system, which stopped them from enrolling and stealing financial aid.
Although there have been more attempts, officials noted that the percentage of fraudulent applications that were detected had increased as a result of each campus’s advancements in fraud detection.
Approximately 85% of fraudulent attempts in 2024 were likely fraudulent, according to Chris Ferguson, executive vice chancellor of finance and strategic initiatives, who addressed at the Board of Governors meeting last month.
In 2024, scammers took almost $2.7 million in state aid and $8.4 million in federal money, according to data from the chancellor’s office.
California
For months, a Pierce College professor has been looking for phony students taking classes.
According to officials from the chancellor’s office, that is a very, very small portion of the total funding that is distributed at California’s community colleges. According to the officials, students have received approximately $1.5 billion in state aid and about $2 billion in total aid from all federal sources, including loans and Pell Grants, in 2024–2025.
According to data from the chancellor’s office, California community colleges have disbursed and written off over $760,000 in state funding and $4 million in federal aid as fraud between January and mid-April of this year.
Hetts stated that his agency was quite happy of its performance, which includes almost 2.1 million students who receive billions in aid overall.
There is no doubt that we can improve. No question exists. “We are fighting really hard, and the vast majority of attempts are stopped.” “Any dollar we lose, we don’t want to lose that dollar,” he said.
What s being done to stop the scams?
The chancellor’s office officials stated that they were redesigning the application system, but they were unable to provide the precise mitigation measures they had implemented to identify and stop financial aid, enrollment, and application fraud.
By spring semester 2026, they intend to launch the new system, which will include integrated fraud detection systems. Ferguson claimed that thwarting fraudsters at the application stage would prevent financial aid and enrollment fraud as a result.
Financial assistance fraud is not a recent occurrence, nor is it exclusive to California, according to Jason Williams, an associate inspector general in the Department of Education’s Office of Inspector General. His organization looks into fraud rings nationwide that target community colleges in particular because of their cheaper tuition, which allows crooks to keep a bigger portion of remaining financial aid funds than at more expensive institutions.
However, they discover new ones as we adapt and plug existing ones, Williams stated. In order to remain effective, we must ensure that we are keeping up with the latest developments and adapting to the fraud.
According to Williams, the Trump administration’s efforts to abolish the Education Department may make the battle against fraud more difficult.A federal judge stopped the department’s mass layoffs in May. Earlier last month, the Trump administration requested that the Supreme Court maintain the layoffs.
Although the department’s Office of Inspector General has not experienced layoffs, officials said that since the start of the fiscal year last fall, deferred resignations and voluntary buyout programs that were made available to all federal employees when Trump took office have caused the office to lose roughly 20% of its workforce.
According to Williams, the team is feeling the effects of that staffing reduction, particularly since the federal hiring embargo is keeping them from replacing important positions.
The agency will probably have more work to do when it implements a new fraud prevention process in the midst of the layoff chaos.
An unexpired, legitimate, government-issued picture ID must be shown to the school by financial assistance applicants in person or via live video conference, according to a new rule announced earlier this month by the Education Department. The school is also required to keep a copy of the identification. Colleges will need to verify the identity of some first-time applicants who are enrolled in the summer term until the change takes effect in the fall.
In a news release announcing the move, Secretary of Education Linda McMahon stated, “We have a responsibility to act when rampant fraud is robbing taxpayers, disrupting college operations, and taking aid away from eligible students.”
California
According to California Community schools Chancellor Eloy Ortiz Oakley, a number of community schools in California have reported a surge in enrollment attempts by bots, which could be an attempt to exploit the system’s internet vulnerabilities or a hoax to obtain financial aid.
According to a representative for the chancellor’s office, the idea of charging $10 for applications at California’s community colleges in order to prevent fraud is still being considered and is not yet finalized, The Times reported. A state act must authorize any new fees.
The chancellor’s office staff stated that their goal is to create an extra barrier for scammers, not to create a barrier for prospective students.
Officials stated that the price might be waived, reimbursed, or credited to students who have shown financial hardship, but it is not being considered as a possible source of income.
According to Jory Hadsell, an executive in the chancellor’s office who focuses on strategic technology projects, there was a lot of discussion about the cost during the May board meeting. However, there was also a feeling that we needed to act quickly to protect all of our students’ access.
The system now uses ID.meto, an IT security business, to enable applicants’ identities be verified. However, according to Hetts from the chancellor’s office, “at the individual college level, staff and faculty have become familiar with the process of determining whether their students are real by checking for authentic engagement in classes.”
Additionally, they are more knowledgeable about some of the tactics used by scammers. During an in-person encounter to confirm their identity, one individual trying to enroll in the L.A. Community College District produced a California driver’s license with their weight indicated in kilos, according to LACCD deputy chancellor Nicole Albo-Lopez.
Examples such as this serve as a reminder to her that while the perpetrators of these schemes are real, the students who are occupying classrooms and embezzling public funds are not.
According to Albo-Lopez, this isn’t just a computer or a robot out there. These crimes are being committed by actual people, and technology has being used as a weapon to target other industries. It just so happens that they are currently concentrating on higher education.
