- Chatbots fill classrooms with fake students
- These chatbots cost colleges millions in fake loans
- AI is burning a huge increase in identity theft
The emergence of artificial intelligence has had a transformative influence on classrooms and university campuses around the world but a new report from Associated Press Claims that Chatbots now poses as a student to collect financial support, and are even “participating in” online classes – and taking seats from real students.
Analysis of fraud reports has revealed a total of 1.2 million fraudulent applications in California alone, which has led to 223,000 suspected false registrations. California in particular is a goal because of the large number of social schools.
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Irreparable losses
However, these “ghost students” do not just apply for a loan and hope for a payment. Chatbots have been deployed to online classrooms where they remain “just long enough” to collect the financial aid control from the college.
Some teachers even report having online classrooms with barely any real students, as Bots have filled the class to the registration limit.
According to researchers, criminals stole at least $ 11 million in local, state and federal financial support that ‘cannot be recovered’, ranging from California’s colleges in the last year, so the problem is widespread.
This is not the first time we have heard of AI fraud burning an increase in identity theft and fraud, with hackers seen ‘leveled’ their tactics, with more sophisticated attacks geared with a higher frequency than ever before.
Many of these scammers will use information obtained from data violations, such as names, addresses, ages and social security numbers. With this data, they will apply for grants and loans using real credentials.
In March 2025, over 300 people were fired from the federal student aid office of the Trump administration, and the department’s fraud survey has lost over 20% of its staff through wear and retirement since October 2025.
