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Incident 1038: Scammers Reportedly Use AI Tools to Impersonate Students and Obtain Federal Aid

Description: Between 2021 and 2025, California community colleges faced a surge in fraudulent applications—now estimated at 34% of all submissions. Reports indicate that scammers used generative AI tools, including ChatGPT, to produce identity-verifying responses that enabled them to impersonate students and obtain financial aid. The fraud allegedly resulted in over $13 million in losses over the past year alone, straining administrative and instructional systems and displacing legitimate applicants.
Editor Notes: See also Incident 721: Fake AI-Generated Students Are Reportedly Enrolling in Online College Classes. While no specific link has been established, the incidents appear to reflect similar patterns of AI-assisted enrollment fraud. They are treated as distinct due to lack of direct evidence connecting them.

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The OECD AI Incidents and Hazards Monitor (AIM) automatically collects and classifies AI-related incidents and hazards in real time from reputable news sources worldwide.
 

Entities

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Alleged: OpenAI and Unknown generative AI developers developed an AI system deployed by scammers , Fraudsters and Scammers targeting California community colleges, which harmed California community colleges , California community college students , Financial aid recipients , U.S. taxpayers and California community college faculty.
Alleged implicated AI systems: ChatGPT and Various generative AI tools

Incident Stats

Incident ID
1038
Report Count
4
Incident Date
2025-04-22
Editors
Daniel Atherton

Incident Reports

Reports Timeline

+1
CheatGPT — California community colleges engage in a cyber battle with scammers who are stealing learning opportunities and millions of dollars in financial aid meant for legitimate students
AI Bots in California Steal Over $10 Million in Federal Financial AidHow scammers are using AI to steal college financial aidTOUGH LESSON Woman finds mystery $9k loan taken out in her name as ‘ghost’ enrolls her in college – she found out from knock on door
CheatGPT — California community colleges engage in a cyber battle with scammers who are stealing learning opportunities and millions of dollars in financial aid meant for legitimate students

CheatGPT — California community colleges engage in a cyber battle with scammers who are stealing learning opportunities and millions of dollars in financial aid meant for legitimate students

moneywise.com

AI Bots in California Steal Over $10 Million in Federal Financial Aid

AI Bots in California Steal Over $10 Million in Federal Financial Aid

reason.com

How scammers are using AI to steal college financial aid

How scammers are using AI to steal college financial aid

apnews.com

TOUGH LESSON Woman finds mystery $9k loan taken out in her name as ‘ghost’ enrolls her in college – she found out from knock on door

TOUGH LESSON Woman finds mystery $9k loan taken out in her name as ‘ghost’ enrolls her in college – she found out from knock on door

the-sun.com

CheatGPT — California community colleges engage in a cyber battle with scammers who are stealing learning opportunities and millions of dollars in financial aid meant for legitimate students
moneywise.com · 2025

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 age…

AI Bots in California Steal Over $10 Million in Federal Financial Aid
reason.com · 2025

f 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 thes…

How scammers are using AI to steal college financial aid
apnews.com · 2025

It was an unusual question coming from a police officer. Heather Brady was napping at home in San Francisco on a Sunday afternoon when the officer knocked on her door to ask: Had she applied to Arizona Western College?

She had not, and as t…

TOUGH LESSON Woman finds mystery $9k loan taken out in her name as ‘ghost’ enrolls her in college – she found out from knock on door
the-sun.com · 2025

SCAMMERS enrolled a woman in college without her knowledge, taking out a $9,000 loan in her name.

Heather Brady was confused when an officer came to her San Francisco home and asked if she had applied to Arizona Western College.

But Brady h…

Variants

A "variant" is an AI incident similar to a known case—it has the same causes, harms, and AI system. Instead of listing it separately, we group it under the first reported incident. Unlike other incidents, variants do not need to have been reported outside the AIID. Learn more from the research paper.
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