Lawmakers hear recommendations to exorcise ‘ghost students’ from colleges, universities

Minnesota colleges and universities are fighting a surge in sophisticated enrollment fraud, as cybercriminals increasingly target education systems to steal financial aid, educational grants and personal data.

The House Higher Education Finance and Policy Committee reviewed findings from a working group tasked with combating fraudulent student applications — a problem that has grown since 2019 with an increase in online classes. Officials said Thursday that attacks now come at scale, with fraud rings attempting to enroll hundreds or even thousands of “ghost students” at a time.

Craig Munson, chief information security officer for Minnesota State, shares findings of the Enrollment Fraud Working Group with the House Higher Education Finance and Policy Committee Feb. 19. (Photo by Michele Jokinen)

A ghost student is someone enrolled with stolen or fabricated identity with no intention of going to class or getting a degree.

Craig Munson, chief information security officer for Minnesota State, said fraudsters are often based overseas and are organized, sophisticated and well financed. What began a decade ago as schemes to obtain discounted software has evolved into a high-stakes battle involving artificial intelligence and identity theft.

Fraudsters are extracting significant personal costs when victims of identity theft find out they owe on a student loan years after someone enrolled them in school without their knowledge, said Rep. Kim Hicks (DFL-Rochester).    

The working group reported that Minnesota’s higher education systems have implemented numerous safeguards, including changes to student information systems and early alert tools to flag suspicious activity. But manual identity checks remain labor intensive, and officials urged lawmakers to fund automated identity proofing, estimated at a cost of $1 million to $1.5 million annually.

Other recommendations include:

• legislative oversight through an annual fraud prevention report;
• student-centered anti-phishing campaigns and staff training;
• equity-focused safeguards to ensure fraud prevention doesn’t create barriers for legitimate applicants, especially those without credit histories; and
• systemwide adoption of the Enrollment Fraud User Guide created by the working group.

Meredith Fergus, financial aid and tuition analyst at the University of Minnesota, noted admissions practices that require proof of high school graduation reduces financial aid theft. Additionally, requiring an application fee discourages bots.