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Higher education is facing a quiet but costly crisis: the rise of the ghost student.

“Ghost students” are not just overwhelmed freshmen who give up on attending classes. They refer to fraudulent enrollments that exploit financial aid. These individuals use fake or stolen identities to exploit the college admissions and funding process. Although they appear on class rosters, they never actually attend any classes, ultimately vanishing with thousands of dollars in public aid. This leaves a trail of deception and exposes the institution to financial loss, academic disruption and significant risk.

According to ABC News,

In California in 2024, community colleges reported 1.2 million fraudulent Free Application for Federal Student Aid (FAFSA) applications, resulting in 223,000 confirmed fake enrollments, and at least $11.1 million in aid lost that could not be recovered.
Across the country, scams are evolving: AI-driven chatbots are now enrolling in online courses, submitting assignments and collecting Federal aid checks before disappearing.

This isn’t an isolated glitch. It’s a systemic problem that’s already impacted colleges across the country. A recent Fortune investigation revealed the extent of the issue, particularly within State-funded and community colleges.

Let’s take a closer look at what’s happening—and how schools can take action.

What Ghost Students Are Really Costing Colleges

Draining Financial Aid Funds

Ghost students are exploiting the very programs designed to make education more accessible. By submitting fake applications and filing for FAFSA, they’re securing grants and loans that should go to real students.

Millions of taxpayer dollars are being misappropriated.
Real students face delays or reductions in funding.
Colleges could be subject to additional Federal review related to institutional oversight.

Blocking Real Students from Classes

When ghost students enroll in courses, they take up space in classes with limited capacity. Real students are waitlisted or forced to delay required coursework causing.

Retention and graduation timelines to be negatively affected.
Institutions appear to have higher demand than they do, skewing planning and resourcing.

Creating Chaos for Faculty

Faculty are on the front lines but often lack the tools to act. Professors see names on rosters that never attend class or engage online. They waste time managing attendance and grading systems for non-existent students. In some systems, participation verification ties directly to financial aid distribution, making instructors unwilling fraud gatekeepers.

Undermining Academic Integrity

Some ghost students now use AI tools to simulate engagement, submitting auto-generated assignments or quizzes just enough to avoid detection. This adds new complexity to academic fraud detection systems. It creates a misleading sense of engagement and learning outcomes. It diminishes the credibility of online and hybrid learning models.

Eroding Institutional Trust

When ghost student scams become public, institutions face:

Loss of public trust from taxpayers and lawmakers.
Stricter audits and compliance measures from Federal and State agencies.
Damage to brand reputation, especially for open-access colleges already facing enrollment challenges.

Best Practices to Combat Ghost Student Fraud

The good news? Colleges and universities can take clear, effective steps to combat ghost student fraud—without disrupting the experience of legitimate applicants and learners.

1. Strengthen Identity Verification at Enrollment

Require secure identity checks—such as photo ID uploads, Government document validation or third-party identity verification services.
Consider real-time methods (e.g., liveness checks or short video interviews) for applicants flagged as high-risk.
Cross-reference application data with trusted third-party sources (address, SSN, IP) to verify legitimacy.

2. Monitor for Behavioral and Digital Red Flags

Track enrollment behaviors across systems—such as IP location, email reuse or batch submissions.
Use device fingerprinting and geolocation to detect patterns consistent with coordinated fraud.
Flag applications originating from anonymized networks (e.g., VPNs, Tor) or unusual time patterns.

3. Audit Student Engagement After Enrollment

Regularly review course engagement data: login frequency, assignment submissions and participation metrics.
Identify students who never log in, submit the same content as others, or only “check in” once to trigger aid distribution.
Coordinate across departments to investigate anomalies in LMS usage and academic records.

4. Empower Faculty and Staff with Reporting Tools

Provide professors with simple tools to flag suspicious student behavior or attendance issues.
Create workflows to escalate these reports to IT, compliance or enrollment services.
Incorporate faculty feedback into larger fraud detection strategies and data models.

5. Automate Risk-Based Escalation

Apply more scrutiny to applications that show unusual patterns, while keeping onboarding smooth for verified students.
Avoid unnecessary friction by using layered security that adapts to the level of risk.
Balance access and security, especially critical for open-access institutions serving vulnerable populations.

A Trusted Partner in the Fight Against Ghost Students

Addressing the issue of ghost students requires more than just technological solutions. It necessitates effective coordination among admissions, IT, financial aid and academic departments, along with the right combination of data, policies and personnel.

At HUMAN Security, we have assisted organizations across various industries in defending against sophisticated fraud campaigns, including fake account creation, credential abuse and automated bot attacks. Our team possesses extensive expertise in fraud detection, protecting student identity and behavioral intelligence, and we are prepared to assist higher education institutions in tackling these challenges as well.

We’re not here to sell a one-size-fits-all product—we’re here to have a conversation.

If you’re a university administrator, faculty member or IT leader concerned about ghost students, HUMAN can provide a free consultation to discuss:

Best practices for protecting your institution
Tailored risk assessment strategies
How to align fraud defenses with student equity and access

Let’s work together to protect financial aid, support faculty and create a safer learning environment for real students.

Ready to talk? Contact HUMAN to start a conversation about how your institution can detect and prevent ghost student fraud before it costs your school and your students.

Carahsoft Technology Corp. is The Trusted Government IT Solutions Provider, supporting Public Sector organizations across Federal, State and Local Government agencies and Education and Healthcare markets. As the Master Government Aggregator for our vendor partners, including [UPDATE VENDOR(s) NAME HERE] we deliver solutions for Geospatial, Cybersecurity, MultiCloud, DevSecOps, Artificial Intelligence, Customer Experience and Engagement, Open Source and more. Working with resellers, systems integrators and consultants, our sales and marketing teams provide industry leading IT products, services and training through hundreds of contract vehicles. Explore the Carahsoft Blog to learn more about the latest trends in Government technology markets and solutions, as well as Carahsoft’s ecosystem of partner thought-leaders.

Low-code Development Exposes New Risk

One of the unintended consequences of our shift to a low-code/no-code development paradigm is the delegation of complex development tasks to Large Language Models (LLMs) and GenAI systems, often bypassing seasoned developers and architects. This opens new opportunities for cybercriminals. These systems excel at functional requirements—‘Build me a website that accepts customer checkout requests’—but they rarely infer non-functional needs, like security, unless explicitly instructed.

In traditional software development, security considerations are often implicit, stemming from the experience of developers and architects who’ve spent years learning from real-world failures. GenAI, however, lacks this depth of experience and focuses narrowly on the task at hand. The result? Incomplete or inadequate security measures in software developed through these systems. As organizations lean more heavily on GenAI, we risk creating an insecure software ecosystem ripe for exploitation by threat actors.

The Proliferation of Knowledge-Based Verification Attacks

We’re on the brink of a surge in automated attacks exploiting vulnerabilities in Knowledge-Based Verification (KBV) systems. Large-scale data breaches, like the one that exposed millions of Social Security numbers last year, are eroding the effectiveness of this approach at confirming identity when creating an account or supporting a password reset. These processes often rely on KBV—such as answering questions about your mother’s maiden name or the street you grew up on—but this information is increasingly accessible to malicious actors.

Human Security GenAI Low Code Blog Embedded Image 2025

As these personal details become more widely available through data breaches and online marketplaces, attackers can easily bypass KBV systems. Worse yet, threat actors can now leverage LLMs to develop sophisticated tools to mine personal data at scale and orchestrate automated attacks against these KBV systems. Organizations face an urgent challenge: how to protect accounts in a world where traditional KBV methods are no longer secure or reliable while still offering users a legitimate path to create an account or regain access when needed.

LLM Safeguards Can Be Overridden or Bypassed by Running Models Locally

With the proliferation of local LLM instances and tools like Ollama, we’ll see safeguards embedded in commercial LLMs eroded or bypassed entirely. Running models locally can allow threat actors to fine-tune them, removing restrictions on malicious activity and enabling custom models optimized for cybercrime. This creates a new frontier for scaled attacks that are faster, more targeted, and harder to detect until it’s too late.

Imagine a threat actor fine-tuning a model to craft phishing campaigns, identify vulnerabilities in software, or automate account takeovers. The ability to localize and modify these models fundamentally shifts the balance, empowering attackers with tools tailored to their malicious intent. The guardrails built into commercial LLMs are no match for this growing trend, amplifying the need for robust detection and defense strategies at every level.

As the public sector continues to adopt innovative technologies, staying ahead of emerging cyber threats is crucial. The increasing sophistication of attacks, such as those targeting KBV systems and leveraging GenAI, highlights the need for stronger protections. By prioritizing comprehensive security measures and threat detection, organizations can mitigate the risks of these evolving vulnerabilities and safeguard their sensitive data and online accounts against malicious actors. It is essential to build and maintain resilient security strategies to ensure the integrity of digital infrastructures in this rapidly changing environment.

To learn more about how HUMAN Security helps the public sector protect citizen accounts, sensitive information, and critical infrastructure, click here.

Carahsoft Technology Corp. is The Trusted Government IT Solutions Provider, supporting Public Sector organizations across Federal, State and Local Government agencies and Education and Healthcare markets. As the Master Government Aggregator for our vendor partners, including HUMAN Security, we deliver solutions for Geospatial, Cybersecurity, MultiCloud, DevSecOps, Artificial Intelligence, Customer Experience and Engagement, Open Source and more. Working with resellers, systems integrators and consultants, our sales and marketing teams provide industry leading IT products, services and training through hundreds of contract vehicles. Explore the Carahsoft Blog to learn more about the latest trends in Government technology markets and solutions, as well as Carahsoft’s ecosystem of partner thought-leaders.