(Source: MIRS.news, Published 01/31/2025) Identify theft and fraud isn’t new, but the ways scammers pry money from places is ever-evolving, and one spooky new scheme could leave Michigan community colleges screaming as students vanish into the ether. 

The scam is called “ghost students."  

It starts with someone creating a fake school identity, whether through identity theft or more fraud, to enroll in a real college in order to fabricate loan and grant applications. From there, they siphon money without ever sitting down in a classroom, according to Experian. 

“You don’t necessarily know who they are, and they can apply at multiple schools. Unfortunately, the community college market is more susceptible because many of those institutions have open enrollment, and a subset don’t charge application fees,” said Brian Suponcic. 

Suponcic is the senior vice president of sales and client operations at a digital bank called BMTX that has put together a product to help combat ghost students and school fraud. He said in some instances, especially the online versions that started during the COVID-19 pandemic, artificial intelligence or bots are providing answers and papers for classes to keep up appearances and continue the fraud. 

He said the schools he deals with have lost millions of dollars in a single semester. 

“You wish that they would use their knowledge for some good, rather than taking money that doesn’t belong to them,” he said. 

One of the other things at risk of being possessed by ghost students was scholarships, such as the Michigan Reconnect and Michigan Achievement Scholarship.  

A spokesperson for the Michigan Department of Lifelong Education, Advancement, and Potential (MiLEAP) said the state doesn’t issue scholarships directly to students, but instead to the institutions’ financial aid offices. Those offices review student information and the colleges request reimbursement from the state, which makes payments to the institutions.   

Suponcic said this type of financial aid was susceptible to fraud, and based on his experience the Federal Application For Student Aid (FAFSA) is the primary process through which scammers haunt. 

“The challenge here with schools is that they’re typically not finding out about this until after the fact and then the money’s gone and that’s not helping anybody,” he said. 

When it comes to the number of ghost students that are haunting the halls of the colleges and draining their spirits, Suponcic said there were statistics from California showing about 20% of their applicants would vanish. 

“I guarantee that every school, for the most part – there are probably exceptions – has somebody enrolled right now that is not a true student, or does not have any intention of actually taking classes, and they’re simply there to exploit the system,” he said. 

He said the push to increase enrollment numbers has also put community colleges in a bind, because they still need to balance enrollment. 

He said many community colleges were still trying to wrap their heads around the concept and didn’t know how to deal with the problem. 

The media relations for Macomb Community College and Oakland Community College declined to participate in the story, because they felt they didn’t have the information or knowledge to contribute. 

A member of the Michigan Community College Association said they were aware of the ghost student fraud and were actively working to address it. 

Suponcic said he admires people in the higher education industry and the problem is large. 

“These bad actors are taking up fake seats at schools, and others might be getting shut out because of someone that doesn’t deserve to be there,” he said.