2 days ago
Feds take action after CSN targeted in $7.4 million hack
LAS VEGAS (KLAS) — The federal government is cracking down to prevent fraud after 8 News Now reported the College of Southern Nevada was the victim of a multimillion-dollar hack.
CSN lost $7.4 million in what's called a 'Ghost Student' scam.
'We were attacked, much like a lot of colleges across the nation have been attacked. Hence the feds taking action,' Dr. Juan Avalos, CSN's vice president of student affairs, said.
In a press release issued on Friday, Secretary of Education Linda McMahon said rampant fraud is 'ripping off taxpayers' and taking financial aid away from students. As a result, she was implementing an extra layer of security to verify FAFSA applications.
'This is more about scammers than it is about people, and people not doing their jobs. I want to make that part clear,' Dr. Avalos said.
From October to December 2023, the community college was getting a large number of federal financial aid applications, according to CSN.
But on the first day of the spring semester in 2024, CSN noticed a problem — empty classrooms.
'It became a level of crisis during spring of 2024, when our instructors were reporting full rosters but no one was showing up,' Avalos said.
The fraud scheme led to CSN paying back the U.S. Department of Education for loans the college awarded to fake students.
Avalos said CSN was vulnerable since it's a large school and has fewer requirements for students to enroll.
The Department of Education announced on Friday a new layer of security it was adding to FAFSA applications, requiring applicants to show in person or on a live video conference, an unexpired, valid, government-issued photo identification.
Avalos applauded the move.
'By the time they hit the colleges, like College of Southern Nevada, we will have a greater sense of confidence that the FAFSAs we're getting belong to real students,' Avalos said.
In a statement regarding the new verification, McMahon said, 'When rampant fraud is taking aid away from eligible students, disrupting the operations of colleges and ripping off taxpayers, we have a responsibility to act.'
But what about the money CSN lost? Who is on the hook for that?
'So about half of it is stuff we're not going to get. The other is stuff that the college has to pay. But we're going to pay it from institutional funds. None of it is going to be kicked to the student,' Avalos said.
He added that CSN will absorb about $4.3 million in losses. The college will be implementing more security upgrades this summer, including adding a third-party verification system on applications, which will vet future applicants' information.
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