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Minnesota flagged over 7,700 bogus students
The State of Minnesota has flagged over 7,700 "ghost students". FOX 9's MIke Manzoni has more.
EDEN PRAIRIE, Minn. (FOX 9) - Federal lawmakers are taking steps to fight back against so-called "ghost students" – scammers who enroll in colleges, claim financial aid and disappear with taxpayer money.
Minnesota colleges grapple with 'ghost students'
What we know:
Scammers are enrolling in colleges using fake identities, applying for financial aid and then vanishing with the leftover cash after tuition is paid.
"They enroll in college under a fake identity. Sometimes they might even show up online and pretend to engage for a period of time," said Jennifer Kerber, a fraud expert at Socure. "They do whatever needs to be done to trigger the disbursement of financial aid, and then they disappear. So, the student never existed, but the money is real."
The Minnesota State system identified more than 7,700 suspected "ghost students" during the 2024-2025 school year. The system, which includes 33 colleges and universities, recently received $3 million to help verify student identities and prevent fraud.
The Department of Education claims that "ghost students" in Minnesota cost taxpayers $12.5 million, but the Minnesota State system said it never sent money to the bogus students and removed them from its rolls.
Community colleges are especially vulnerable to these scams because of open enrollment policies and fewer safeguards. These schools are designed to be accessible, which can make them attractive targets for fraudsters, experts said.
How 'ghost students' impact real students
Why you should care:
"Ghost students" do more than just take money – they also take up classroom seats that could go to real students.
"In one online class that had 50 spots, as soon as it opened up, within two minutes, all of the spots were taken," said Kerber, highlighting a case in another state. "So, this professor thought he had this really hot class that he was going to be offering, and it turns out only two of the students enrolled in the class were real. The rest were all fake."
Financial aid money typically goes directly to colleges, which take out tuition costs before sending any leftover funds to students. For "ghost students," that means they can pocket the remaining money without ever attending a class.
Minnesota State said it has put new protections in place since discovering the problem. The federal bill moving through Congress would flag colleges that enroll "ghost students" and allow for audits and other oversight measures. The bill still needs to pass the Senate before heading to the president's desk.