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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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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
2
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 Aid
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

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…

Variants

A "variant" is an incident that shares the same causative factors, produces similar harms, and involves the same intelligent systems as a known AI incident. Rather than index variants as entirely separate incidents, we list variations of incidents under the first similar incident submitted to the database. Unlike other submission types to the incident database, variants are not required to have reporting in evidence external to the Incident Database. Learn more from the research paper.

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