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California’s community colleges are reporting a rise in financial aid fraud. In January, suspected bots represented 1 in 4 college applicants. Schools have given away millions to these scams, and college officials say fraudsters are getting smarter with the help of AI.
They’re called “Pell runners.” After enrolling at a community college they apply for a federal Pell grant, collect as much as $7,400, then vanish.
Since fall 2021, California’s community colleges have given more than $5 million to Pell runners, according to monthly reports they sent to the California Community Colleges Chancellor’s Office. Colleges also report they’ve given nearly $1.5 million in state and local aid to these scammers.
The chancellor’s office began requiring the state’s 116 community colleges to submit these reports three years ago, after fraud cases surged.
At the time, the office said it suspected 20% of college applicants were fraudulent. Because of the COVID-19 pandemic, the federal government loosened some restrictions around financial aid, making it easier for students to prove they were eligible, and provided special one-time grants to help keep them enrolled. Once these pandemic-era exceptions ended in 2023 and some classes returned to in-person instruction, college officials said they expected fraud to subside.
It hasn’t. In January, the chancellor’s office suspected 25% of college applicants were fraudulent, said Paul Feist, a spokesperson for the office.
“This is getting significantly worse,” said Todd Coston, an associate vice chancellor with the Kern Community College District. He said that last year, “something changed and all of a sudden everything spiked like crazy.”
Online classes that historically don’t fill up were suddenly overwhelmed with students — a sign that many of them might be fake. Since 2022, the state has allocated more than $125 million for fraud detection, cybersecurity and other changes in the online application process at community colleges.
College officials suspect most of the fake students are bots and often, they display tell-tale signs. In Sacramento, community colleges started seeing an influx of applications from Russia, China, and India during the start of the pandemic.
The largest reform underway is a new version of CCCApply, the state’s community college application portal, which will offer more cybersecurity, Feist said. He also said there are other “promising” short-term projects.
One of them, a software tool known as ID.Me, launched in February. The contract with the software company, costing more than $3.5 million, gives it permission to check college applicants for identification, including video interviews in certain cases. Privacy experts have warned that the company’s video technology could be racially biased and error-prone.
To mitigate these privacy concerns and avoid creating enrollment barriers, applicants need to opt in to the new verification software.
Source: Calmatters.org.
