California’s community college system is investigating what appears to be a large-scale fraud scheme, which involves more than 65,000 fraudulent financial aid applications filed by “students” who were likely bots.
Patrick Perry, director of policy, research, and data with the California Student Aid Commission, told the Los Angeles Times that he became suspicious during a routine check of federal financial aid records, when he noticed a dramatic increase of first-time applicants of a certain age range and income group within a short period. All were over 30 and earned less than $40,000 per year.
“We were kind of scratching our heads going, ‘Did or didn’t 60,000 extra older adult students really attempt to apply to community colleges here in the last few months?'” said Perry. He told the paper the number of suspected false applications could be greater than 65,000.
Officials at California Community Colleges (CCC) declined to say whether any money was paid to scammers, although Perry said he believes the issue was caught early enough that the aid was likely not distributed.
The 116-college system also detected unusual admissions activity. Valerie Lundy-Wagner, the CCC’s interim vice chancellor of digital innovation and infrastructure, on Monday said in a memo (pdf) that about 20 percent of recent traffic on its main online applications portal was “malicious and bot-related.”
“It is clear that nationally, bad actors are attempting to take advantage of any vulnerability across different sectors,” Lundy-Wagner warned in the memo. The Chancellor’s Office now requires that any student account associated with fraudulent activity be suspended, and that all colleges must submit monthly reports detailing suspected and confirmed registration and financial aid fraud, including any money sent to scammers.
Eloy Ortiz Oakley, the CCC chancellor who is currently on leave, told the LA Times that at least six colleges have reported a surge in enrollment applications by students that could be fake.
“I’m certainly alarmed,” Oakley said. “There’s lots of unscrupulous players right now trying to access and exploit benefits, not unlike what’s happened with unemployment insurance and any number of other benefits that have been made available recently because of the pandemic.”
The scammers could be targeting the federal relief money the colleges have been receiving during the COVID-19 pandemic, although the CCC didn’t specify which financial aid awards were involved in this particular case. Community colleges across the Golden State are entitled to at least $4.3 billion in three rounds of federal higher education relief payment, including $1.75 billion designated to go directly to students to help them cover tuition, rent, and other living expenses.