'Ghost Student' Took Out $9K Loan in Her Name

It started like an ordinary day for Heather Brady in San Francisco — until a police officer showed up asking whether she had enrolled at Arizona Western College. That's when Brady learned someone had applied in her name using fake financial aid credentials — and a $9,000 loan had been issued, paid to another person, but tied to her identity.

The Rise of the 'Ghost Student'

This scheme isn't a one‑off error. As artificial intelligence and online learning have surged, so has the use of "ghost student" scams, according to the Associated Press. Fraudsters use chatbots to create fake accounts, enroll them in real courses, and collect financial aid checks. The Education Department introduced a temporary rule requiring government‑issued ID for first‑time aid applicants — covering around 125,000 borrowers this summer — to better catch these frauds.

Multiple Victims Emerge

Brady isn't alone. Wayne Chaw, who attended De Anza Community College years ago, received notices about enrollment in an energy‑management course he never took. Scammers stole $1,395 in aid, using chatbots to complete assignments and fool the system.

In Louisiana, Brittnee Nelson discovered fraudulent loans — one hitting Delgado Community College to the tune of over $5,000 — after her credit score dropped by 27 points. It took her two years and constant vigilance to remove the debt from her record.

Community College as a Target

Community colleges have become prime targets. With lower tuition, more of the financial aid goes directly to students — making fraudulent loans more lucrative. In 2024 alone, California colleges flagged 1.2 million suspected fake applications and 223,000 questionable enrollments.

Scammers are estimated to have stolen at least $11.1 million in federal, state, and local aid from California community colleges last year — funds that could not be recovered.

The Human Toll

For victims like Brady, Chaw, and Nelson, it's not just about money — it's the stress, time, and uncertainty. Brady, who was recently laid off before enrolling in City College, found classes full — and later learned bots had pushed out real students. "I just can't imagine how many people this is happening to that have no idea," she said, according to the AP.

Nelson likened the experience to having one's home robbed. She praised the new ID verification — hoping it helps prevent such nightmares.

Government Cracks Down — Will It Help?

To stem the tide, the Education Department now requires government‑issued ID for first‑time aid applicants this summer and is crafting stricter fall guidelines. The Department warned that fraud rates have reached "a level that imperils the federal student aid program," according to the AP.

What You Can Do

If you're worried about ghost‑student scams, consider these steps:

• Monitor your credit regularly for unexpected loans.
• Check with colleges or loan services if you've never applied.
• Watch for unfamiliar class enrollments or sudden dropped course access.
• Report identity theft right away — though as Chaw found, phone lines may be tied up.

A Cautionary Tale

This isn't just a tale of stolen money — it's identity theft writ large. These scams use the latest AI tools and flimsy oversight to run rings around institutions meant to help students. The emotional and financial toll can rip through lives, even as the fraudsters operate behind the screens.

As you read this, remember: a simple knock on the door could be more than just a delivery — it might reveal someone else has claimed your identity in college, and left you with the bill.

References: TOUGH LESSON Woman finds mystery $9k loan taken out in her name as 'ghost' enrolls her in college – she found out from knock on door | How scammers are using AI to steal college financial aid