A wave of frauds has recently been recorded in the United States with the use of AI and applying for student loans on behalf of real people who are not even aware of it.
Fraudsters use AI-powered bots to pose as students and apply for student loans in the names of real people. In particular, a resident of San Francisco Heather Brady was one of the victims of such a scam.
The police came to her home with questions about her potential enrollment in a college in Arizona. The woman had never filed such an application, but the fraudsters used her personal information to obtain state tuition assistance.
Later Brady found out that she had a student loan in her name for more than $9,000. She never attended the classes for which the loan was issued.
The problem is compounded by the fact that online classes in the United States are becoming increasingly popular, and more sophisticated AI-based tools allow fraudsters to automate the application process and stolen personal data in fake documents.
These fake students, impersonated by AI bots, are able to fill out and submit applications, register for classes, participate in coursework, and even submit completed assignments without human intervention. In some cases, professors have learned that almost none of their students is not a real person. At the same time, real students cannot enroll in classes because AI bots have already taken all the seats.
According to According to the Associated Press, in 2024, community colleges in California reported 1.2 million suspicious applications that led to more than 220 thousand fake enrollments. In 2024, the U.S. higher education system lost $11.1 million due to similar fraudulent schemes.
Community colleges are particularly vulnerable because they have lower tuition fees, and therefore most grants and loans go directly to students for living expenses. Wayne Chow used to attend college classes De Anza Community College. Suddenly, he received a message about a course he had never enrolled in. The scammers used his social security number to get $1.4 thousand, and an AI bot sent the completed homework on his behalf.
Brittney Nelson, a small business owner in Louisiana, discovered that loans had been taken out in her name for schools she had never attended. Despite carefully monitoring her credit history and protecting her identity, it took her two years to get rid of the fraudulent debt.
Representatives of the colleges claim that they have no real authority to counter these fraudulent schemes. This should be done by federal agencies The U.S. Department of Education has recently taken a temporary measure requiring first-time federal aid applicants to prove their identity with a government-issued ID.
Recent prosecutions of fraudsters include the case of a Texas man accused of organizing a $1.5 million fraud scheme. Another Texas resident admitted to using the names of prisoners to obtain $650,000 in benefits A New York resident who pleaded guilty to a ten-year, $450,000 fraud.
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