Inside California community colleges’ persistent struggle to stamp out financial aid fraud

Ed Source 

Michael Burke and Daniel J. Willis

May 28, 2026

Colleges have used AI to get fraud down from peak levels, but scammers are still stealing hundreds of thousands of dollars every month.

Years since first being targeted by Covid-era financial aid scammers, California’s community colleges still can’t fully shake the fraud.

It’s not for lack of trying. Colleges have made progress by using machine learning tools to sniff out many fake students created by fraudsters via artificial intelligence. Most colleges now use AI software to screen applicants.

The problem, however, is that the most sophisticated scammers keep exploiting new loopholes or vulnerabilities to steal financial aid, perpetuating a seemingly never-ending cat-and-mouse chase for the state’s community colleges.

Some pretend to be homeless or underage to shirk verification requirements. Others steal the identities of former students. And there are those who pretend to be real students for an entire semester, taking and completing courses to appear legitimate before stealing aid in the following term.

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