As higher education institutions continue to expand their digital services, the risk of identity fraud targeting students and financial aid programs continues to escalate. The U.S. Department of Education’s recent announcement requiring live identity verification for FAFSA applicants starting this year highlights a growing, urgent effort to combat this evolving threat. Cybersecurity leaders working within or alongside higher education organizations must understand emerging tactics and effectively strengthen verification protocols to protect students, institutions, and taxpayers.
One of the most concerning fraud trends impacting colleges and universities is the rise of “ghost students.” These are fake identities created using stolen or synthetic data to enroll in schools, often with the sole intent of accessing financial aid funds. Ghost student fraud not only drains critical resources intended for legitimate students but also creates significant operational and security challenges for institutions.
The move to online learning and remote onboarding accelerated this problem. Traditional in-person verification methods shifted to remote processes, which inevitably lowered barriers for fraudsters. Recent data shows that California colleges reported over 1.2 million fraudulent applications in 2024, including 223,000 suspected fake enrollments at community colleges. This widespread fraud results in millions in lost aid that ultimately impacts taxpayers.
