Last year, California community colleges reported a staggering $11.1 million in financial aid theft, primarily driven by sophisticated scams exploiting identity theft. As online education grows, cybercriminals have utilized AI to create 'ghost students' that falsely enroll in classes and claim federal funds. Many victims, unaware of fraudulent loans taken in their names, face long, arduous processes to rectify their financial situations. In response, the U.S. Education Department has introduced new ID verification requirements for first-time federal aid applicants, aiming to curb this alarming trend.
The rise of artificial intelligence and the popularity of online classes have led to an explosion of financial aid fraud.
Victims of identity theft who discover loans fraudulently taken out in their names must go through months of calling colleges and loan servicers to try to get the debt erased.
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