Thousands of “ghost students” use AI to steal millions in student loans, DOJ says

Applying for FAFSA may get messy as DOJ “ghost student” crackdown ramps up.

The short version

• The US has charged five individuals as part of the first broad federal crackdown on “ghost students”—fraudsters who steal the identities of hundreds of Americans to pose as fake college students and steal student loans.
• “If you steal American identities, if you steal taxpayer dollars, if you exploit programs meant to help students build a future—we will find you,” McDonald said.
• “Whether you are in Nebraska, New Jersey, Virginia, or Nairobi, we will pursue you.” At a press conference , McDonald was joined by FBI and Department of Education officials to explain how the scheme works.

What happened

It starts with bad actors purchasing personally identifiable information (PII) of Americans—most frequently targeting high school graduates who never attended college and went straight into the workforce. Once they have that sensitive data, they fill out the Free Application for Federal Student Aid (FAFSA) while seeking to enroll in universities and community colleges.

Why it matters

If accepted, student aid is distributed first to schools to cover tuition and fees, but any leftover money is deposited into bank accounts controlled by the fraudsters.

Summary by Nerd News Network. Read the full article at Ars Technica via the links above and below.