Securing Higher Education: Combating Enrollment Fraud and Empowering Student Financial Success
Higher education institutions are facing a costly and growing crisis: enrollment fraud. Between 2020 and 2022, the cost[1] of acquiring a new student surged by up to 32%, straining already tight budgets. At the same time, “ghost students” using stolen identities to enroll fraudulently put institutions at even greater financial risk.
The rise of enrollment fraud not only threatens financial stability but also poses significant risks to campus security. As fraudulent actors infiltrate educational institutions through digital means, they potentially gain access to sensitive student data, campus resources, and even physical spaces. This breach of security extends beyond financial implications, raising concerns about the safety and privacy of legitimate students and staff. Campus security teams now face the dual challenge of protecting physical spaces and safeguarding digital identities. The ghost student phenomenon has evolved from a mere administrative issue to a critical security threat, demanding a comprehensive approach that integrates cybersecurity measures with traditional campus safety protocols.
Beyond the direct monetary losses, this wave of fraud is disrupting academic integrity. When schools unknowingly distribute aid to fake students, legitimate learners lose out. Inflated enrollment numbers lead to misallocated resources, making it harder for genuine students to access the courses they need to graduate. As institutions struggle to keep up, the quality of education and student success are in jeopardy because of this growing problem.
When Fake Students Cost Real Money: Ghost Students
Ghost students aren’t just a financial burden but a growing digital threat. With open enrollment policies and minimal application barriers, community colleges have become prime targets for fraudsters using stolen identities and automated bots to exploit financial aid and institutional resources. In California alone, a shocking 20% of community college applications were flagged as fraudulent, with the California State Chancellor’s Office identifying 460,000 suspicious applications out of 2.3 million. The problem extends beyond California. According to the Chronicle of Higher Education, fraudsters sent 80 fake applications to Prince George’s Community College in Maryland, submitting one every seven minutes for hours, highlighting the scale and speed at which these digital attacks can occur.
Across the U.S., colleges and universities struggle to combat a surge in digital enrollment fraud, where cybercriminals manipulate weak security systems to enroll fake students at scale. Academic institutions risk financial losses, misallocated resources, and compromised student data without vigorous identity verification and digital safeguards. Higher education institutions must prioritize digital security as cyber threats evolve to protect their students, budgets, and integrity.
Enrollment fraud is not just an administrative headache; it’s a financial and operational crisis that threatens the stability of higher education institutions. When universities unknowingly disburse financial aid to fraudulent applicants, these funds are rarely recovered, resulting in staggering economic losses. In California, Fullerton College identified $1 million in financial aid payments that would have been lost to fraud had officials not halted them in time. This demonstrates the potential scale of losses for a single institution.
This escalating threat to campus security demands immediate action. Manual verification processes are now dangerously outdated due to increasingly sophisticated fraud tactics. Without adopting modern identity verification tools and digital safeguards, colleges and universities risk losing millions while jeopardizing the education of real students who deserve support.
Strengthening Enrollment Security in Higher Education
In the face of the growing threat posed by ghost students, universities are turning to cutting-edge identify verification technologies to safeguard the integrity of their enrollment processes. By harnessing the power of artificial intelligence and machine learning, institutions can uncover patterns of fraudulent activity that would otherwise remain hidden. These advanced tools not only detect inconsistencies in enrollment data, but they can also proactively prevent fraudulent actions, revolutionizing the way colleges protect their resources and students. This technological leap will significantly shift how higher education defends against threats.
Furthermore, implementing a streamlined, secure enrollment verification process goes beyond efficiency. It empowers universities to reallocate their time and resources to what truly matters: student success. During peak enrollment periods, the strain of manual verification can overwhelm admissions teams, draining valuable hours that could be better spent on supporting students and enhancing educational outcomes. By adopting advanced digital solutions, institutions can significantly reduce the burden of time-consuming manual reviews, freeing staff to focus on strategic initiatives that foster student engagement, retention, and academic achievement. Higher education institutions could save an average of 15-20 hours each week during peak enrollment, enabling them to redirect their efforts toward shaping a more dynamic and supportive learning environment.
Charting the Student Financial Roadmap
While preventing and reducing enrollment fraud is critical, it is equally important to consider the financial journey students embark upon once they step onto campus. For many students, college is the first time they open a bank account, viewing it as a key tool for managing student loans and daily living expenses. Without secure identity verification at the point of enrollment, fraudulent actors can gain access to the financial aid meant for genuine students, potentially derailing their financial path from the very start. By safeguarding student identities from day one, universities ensure that legitimate students receive the financial support they need, allowing them to build a strong foundation as they navigate their finances during college and after graduation.
Providing students with the right tools and knowledge to manage their finances responsibly can leave a profound and lasting impact on their futures. Universities, in working with FinTech providers, have the opportunity to offer valuable financial literacy resources that empower students to make informed choices about their money. As students navigate the journey through higher education and into their careers, they often face new economic challenges, from paying off loans to managing their income and planning for the future. This transition period can be particularly demanding for students who balance work and studies simultaneously.
By equipping them with the right tools early on, universities and fintech providers can help students of all ages foster long-term financial health and empower them to build a secure financial future long after they leave the classroom.
As higher education continues to evolve, it’s clear that tackling enrollment fraud and financial mismanagement requires a unified, proactive approach. By combining advanced identity verification technologies with a focus on financial literacy, schools can protect students, preserve the integrity of education, and ultimately shape a more equitable and resilient system.
This article originally appeared in the May / June 2025 issue of Campus Security Today.