Top Takeaways California’s community colleges have lost more than $30 million since 2024 to scammers who pretend to be real students and steal financial aid. That includes $1.9 million in the first quarter of this year. The fraud is down from peak levels in early 2025, as colleges now use artificial intelligence to sniff out fraudsters. However, the most sophisticated scammers still find ways to steal financial aid, discovering new loopholes and vulnerabilities to exploit. Years since first being targeted by Covid-era financial aid scammers, California’s community colleges still can’t fully shake the fraud. It’s not for lack of trying. Colleges have made progress by using machine learning tools to sniff out many fake students created by fraudsters via artificial intelligence. Most colleges now use AI software to screen applicants. The problem, however, is that the most sophisticated scammers keep exploiting new loopholes or vulnerabilities to steal financial aid, perpetuating a seemingly never-ending cat-and-mouse chase for the state’s community colleges. Some pretend to be homeless or underage to shirk verification requirements. Others steal the identities of former students. And there are those who pretend to be real students for an entire semester, taking and completing courses to appear legitimate before stealing aid in the following term. In the first quarter of this year, the system of 116 colleges dispersed about $1.9 million in financial aid to students who turned out to be illegitimate, according to data obtained by EdSource through a California Public Records Act request. That included just under…
