How California community colleges are using AI to battle financial aid fraud
Michael Burke
September 2, 2025
The state’s colleges lost more than $11 million last year to online scammers.
Community colleges in California for years have been fighting a losing battle with fraudsters who have stolen millions of dollars in federal and state financial aid. But now state officials believe they are finally turning a corner thanks to new tools.
The game-changer? Artificial intelligence.
About 80 of the state’s 115 community colleges are now or will soon be using an AI model that detects fake students by looking for information such as shared phone numbers, suspicious course-taking patterns, and even an applicant’s age. Officials say the AI catches twice as many scammers as the human staff, with some campuses estimating that they are now detecting more than 90% of fraudsters, who are a mix of bots and human criminals, sometimes even located in other countries.
California’s community colleges have lost at least $18 million in aid since 2021, though the actual total could be much higher since colleges were not as skilled at identifying fraud early in the pandemic as they are now. Most of the stolen funds are federal aid, which the local colleges are responsible for distributing. But scammers have also grabbed millions in state aid, including Cal Grants and institutional awards.
