Latest news with #CaliforniaCommunityCollegesChancellor'sOffice
Yahoo
30-04-2025
- Yahoo
AI Bots in California Steal Over $10 Million in Federal Financial Aid
If you're a community college student in California, there's a chance that at least one of your fellow students is actually an AI bot robbing taxpayers. Recent data from the California Community Colleges Chancellor's Office suggest that these bots have stolen more than $10 million in federal financial aid and upward of $3 million in state aid between March 2023 and March 2024. The scam is simple: Bots create AI-generated student profiles, apply for enrollment, and submit minimal online coursework—often AI-generated—to stay enrolled long enough to receive federal and state aid disbursements intended for low-income students. The scammers are known as "Pell runners," who disappear after collecting the $7,400 federal grant. According to reporting by CalMatters, cases surged after restrictions around financial aid were loosened during the COVID-19 pandemic to make it easier for eligible students to access the one-time grants, which were provided to keep students enrolled. At the same time, coursework was moved online to comply with the state's lockdowns, opening the door to virtual scammers. As early as 2021, the Chancellor's Office estimated that 20 percent of applications were fraudulent. Now, increasingly sophisticated AI tools have made the problem worse, and recent data suggest that around 34 percent of California community college applicants are fake. Despite California allocating over $150 million since 2022 toward cybersecurity to help authenticate students and combat fraud at community colleges, scammers have successfully stolen more financial aid with each passing year. California isn't the only state experiencing this problem. The FBI has investigated financial aid fraud cases across the country, including in Maryland, South Carolina, and Alabama. Nationwide, these crimes cost institutions over $100 million in 2023—a tenfold increase from the annual average before 2020. Making matters worse, each fake student enrolled in a class takes a spot away from a real student who needs credit to graduate, and instructors increasingly have to sniff out bots who weren't filtered out during the admissions process. Bots often impersonate homeless, undocumented, or former foster care students who do not need to verify their identity to enroll in a California community college and blame technological challenges for their inability to communicate with teachers. Additionally, the increased amount of AI-generated submissions by real students makes it difficult for instructors to identify scammers. Alarmed by the number of stolen taxpayer dollars, congressional Republicans from the Golden State have called for an investigation into their state's higher education system to "prevent further waste, fraud, and abuse" earlier this month. In a statement made to CalMatters, Chris Ferguson, a representative of the California Chancellor's Office, said the office has so far "not been contacted by the U.S. Department of Education or the U.S. Attorney General about an investigation." Ferguson also emphasized that a relatively low number of fraudulent students make it to the financial aid disbursement phase, making up only "about 0.21% in FY 2023-24." The post AI Bots in California Steal Over $10 Million in Federal Financial Aid appeared first on
Yahoo
24-04-2025
- Business
- Yahoo
California colleges fight cyber battle with scammers who've stolen $10M in federal aid meant for students
California laws require that community colleges in the state accept any legitimate student, and state lawmakers have spent decades making enrollment easier so everyone gets a chance at an education. Unfortunately, as the non-profit news agency CalMatters reveals, scammers are using this to their advantage, enrolling in California's community colleges as fake students to steal millions in federal financial aid. I'm 49 years old and have nothing saved for retirement — what should I do? Don't panic. Here are 5 of the easiest ways you can catch up (and fast) Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how Nervous about the stock market in 2025? Find out how you can access this $1B private real estate fund (with as little as $10) The rise of AI has only made this process easier for thieves, as they can use ChatGPT to create written responses aimed at verifying their identities. Here's how the scam works, along with some details on how it's leading to stolen federal funds and potentially putting schools at risk. Fake students are a big problem in California community colleges, and the problem is growing. According to CalMatters, in 2021, the California Community Colleges Chancellor's Office reported that 20% of applicants were likely fake. That jumped to 25% in 2024. Now, the state believes one in three student applications — 34% — is fake. "Those are all the ones that are stopped,' John Hetts, executive vice chancellor for the data team at the chancellor's office, told CalMatters. Read more: This hedge fund legend warns US stock market will crash a stunning 80% — claims 'Armageddon' is coming. Don't believe him? He earned 4,144% during COVID. Here's 3 ways to protect yourself Colleges report that the imposters have stolen millions in financial aid in the past few years; the scammers have siphoned off more than $10 million in federal funds and $3 million in state funds in the past 12 months alone. While it's true that this is just a small share of the $1.7 billion in federal aid and $1.5 billion in state aid distributed to California's community colleges, it's still a lot of money lost to fraud. Since 2022, officials have spent $150 million on cybersecurity to fight back against the growing scam. The chancellor's office even enlisted the help of tech companies. Individual schools have contracted with to provide ID verification for enrollees. Hetts said it's an ongoing battle, as every time colleges update technologies to keep fraudsters out, the bad actors adapt with new techniques. Hetts added that many students accepted at California's community colleges, including foster children and undocumented individuals, don't have much documentation, making the process of separating legitimate applicants from fraudsters even harder. Federal and state funds are likely to continue to flow to the thieves, as real students who need financial aid and a good education are competing with bots for space. Teachers are now forced to take on a policing role and root out fake students. They have to do it fast as it's difficult to remove students after the first week of school. Then there is a financial penalty for dropping students — even if they're fake. Funding is pegged to enrollment. 'If they see I'm running a class that starts with 35 students and ends with 15, that looks terrible," said librarian Heather Dodge, who teaches an online research course at Berkeley City College. Federal officials helped fight such fraud in the past, with the Department of Education opening an investigation in 2022 into a fraud ring using the identities of 57 individuals that stole $1.1 million in student aid over four years. However, community leaders already felt the federal government could do more, even before the cuts. Unfortunately, leaders at these colleges warn that the Trump Administration's recent cuts to the Department of Education are likely to exacerbate this growing problem, especially given that the office in charge of administering federal financial aid has lost around half of its staff since Trump took office. 'When you direct less resources to combating fraud … you're going to get more fraud,' Hett said. Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan 'works every single time' to kill debt, get rich in America — and that 'anyone' can do it Rich, young Americans are ditching the stormy stock market — here are the alternative assets they're banking on instead Here are 5 'must have' items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you? This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
