Financial aid fraud is growing at California’s community colleges
Michael Burke
November 13, 2024
The colleges have lost more than $7.5 million this year to sophisticated online scammers
Since the Covid-19 pandemic, California’s community colleges have been plagued by scammers who pose as students and enroll to steal financial aid — and now it’s getting even worse.
The state’s 116-college system has lost more than $7.5 million to financial aid fraud this year, state data shows. That’s already much higher than the colleges reported losing all of last year. Most of it is federal aid, in the form of Pell Grants intended for low-income students.
Colleges have increased their efforts to detect and deter the fraud through both more human interaction and automated detection. Officials believe they are getting better at doing so, but the increasing losses show that the college system is still vulnerable to scammers, who are often part of sophisticated crime rings, some overseas.
Community colleges have long been susceptible to fraud, since they are generally open access and usually don’t deny admission to students who meet basic requirements as the more selective University of California and California State University do. The problem was made worse by the Covid-19 pandemic. The shift to remote instruction “created fertile ground” for fraudsters, said Paul Feist, a spokesperson for the chancellor’s office overseeing California’s community colleges. The scammers wanted to get their hands on the nearly $2 billion in federal stimulus dollars available for emergency student aid available across the colleges.
