JOHN: THERE IS A RISING THREAT U.S.

COLLEGES HAVE TO DEAL WITH - - SOPHISTICATED CRIMINAL NETWORKS ARE USING IDENTITY THEFT TO DISGUISE THEMSELVES AS STUDENTS.

THEY FLOOD COLLEGES WITH APPLICATIONS IN ORDER TO SIPHON OFF TENS OF MILLIONS OF DOLLARS IN FINANCIAL AID.

WHAT'S MORE, THEY'RE TAKING UP SEATS THAT REAL STUDENTS NEED.

A SERIES OF RECENT REPORTS REVEALED THAT THESE SO-CALLED GHOST STUDENTS EVEN GO AS FAR AS TURNING IN HOMEWORK ASSIGNMENTS SO THEY DON'T GET DROPPED FROM CLASSES.

AS COLLEGES ARE SET TO BEGIN A NEW ACADEMIC YEAR, ALI ROGIN SPOKE WITH AMANDA GERUT OF FORTUNE, WHO'S BEEN REPORTING ON THIS GROWING SCAM.

>> THANKS SO MUCH FOR JOINING US.

LET'S START WITH THE BASIC QUESTION WHICH IS WHAT OUR GHOST STUDENTS AND HOW DO THEY OPERATE?

>> GHOST STUDENTS ARE MASSES OF SYNTHETIC OR FAKE IDENTITIES AND THEY ARE USED BY THESE SOPHISTICATED CRIMINAL NETWORKS TO FLOOD COLLEGE APPLICATIONS ENROLLMENT SYSTEMS.

THESE ARE SOPHISTICATED BROAD RANK OPERATING OVERSEAS IN PLACES LIKE PAKISTAN, BANGLADESH AND VIETNAM, AND THEY ARE SWARMING COMMUNITY COLLEGE SYSTEMS.

THEY ARE APPLYING, AND ROLLING, AND GETTING INTO CLASSES AND REQUESTING FINANCIAL AID.

SOMETIMES IT IS A REVENUE GENERATION SCHEME JUST ABOUT MAKING MONEY.

OTHER TIMES IT'S ABOUT GETTING THAT .EDU EMAIL ADDRESS.

THAT IS LIKE A GOLD BAR.

YOU LOOK LIKE A LEGITIMATE COLLEGE STUDENT AND YOU CAN GET DISCOUNTS ON LAPTOPS, SOFTWARE, STREAMING SERVICES AND FRAUDSTERS WANT A PIECE OF THAT ACTION.

> AND THE FINANCIAL ELEMENT FOR THOSE OPERATING STRICTLY OUT OF A PROFIT MOTIVE, HOW DOES THAT WORK?

THEY ARE GETTING STUDENT LOANS?

>> THEY ARE APPLYING FOR FINANCIAL AID, APPLYING FOR STUDENT LOANS, AND USUALLY THINK - - USING USUALLY STOLEN IDENTITIES TO DO SO.

SO THE VICTIMS ARE NOT JUST THE COLLEGES THEMSELVES BUT PEOPLE WHO HAVE NOTHING TO DO WITH IT.

PEOPLE ARE HAVING THEIR IDENTITIES STOLEN AND HAVING FINANCIAL AID TAKEN OUT IN THEIR NAMES.

>> WHAT DO WE KNOW RIGHT NOW ABOUT THE SCALE OF THIS PROBLEM?

>> THE SCALE OF THE PROBLEM IS DIFFICULT TO PUT YOUR ARMS AROUND BECAUSE THESE SCAMMERS ARE STEALING LEGITIMATE PEOPLE'' IDENTITIES SO IT USUALLY TAKES A PERSON NOTICING SOMEONE HAS TAKEN OUT A LOAN IN THEIR NAME.

RIGHT NOW THE DEPARTMENT OF EDUCATION HAS IDENTIFIED $150 MILLION WITH INELIGIBLE STUDENTS AND $30 MILLION OF THAT WENT TO PEOPLE WHO WERE DEAD AND HAD THEIR IDENTITY SLOWED -- STOLEN.

IN CALIFORNIA, COMMUNITY COLLEGES HAVE BEEN HIT VERY HARD BUT IT IS NOT JUST A CALIFORNIA PROBLEM.

MICHIGAN, MINNESOTA, OREGON, NEW JERSEY.

SOME LARGEST DISTRICTS ARE VULNERABLE TO THIS AND SOME OF THE SUPER SMALL RURAL COMMUNITY COLLEGES ARE ALSO BEING HIT.

>> WHY IS IT THAT THESE RINGS ARE TARGETING THOSE SCHOOLS AS OPPOSED TO FOUR-YEAR UNIVERSITIES THAT MIGHT HAVE MORE MONEY?

> COMMUNITY COLLEGES ARE VULNERABLE TO THIS BECAUSE THEY ARE MEANT TO BE OPEN ACCESS INSTITUTIONS.

YOU CAN TAKE A CLASS WHEREVER YOU WANT -- WHENEVER YOU WANT AT AN AFFORDABLE PRICE.

THEY ARE OPEN ACCESS.

AND THAT IT IS TYPICALLY REQUIRED BY STATUTE TO ACCEPT ANY ELIGIBLE STUDENT.

FRAUDSTERS KNOW THAT AND THEY ARE EXPLOITING THAT BY THE WAY THEY ARE FLOODING THE SYSTEMS.

>> CERTAINLY THE PEOPLE WHOSE IDENTITIES ARE BEING STOLEN OR LOSING MONEY BUT THERE'S ALSO A DOWNSIDE FOR THE STUDENTS AND TEACHERS LEGITIMATELY TRYING TO OPERATE WITHIN THE COMMUNITY COLLEGE SYSTEM.

>> FOR REAL STUDENTS, EVERY DOLLAR THAT GOES TO A GHOST STUDENT IS ONE LESS DOLLAR FOR A LEGITIMATE STUDENT.

REAL STUDENTS ARE LOSING OUT ON THE OPPORTUNITY TO GET FINANCIAL AID TO PAY FOR THEIR CLASSES.

THEY ARE LOCKED OUT OF THE CLASSES THEY NEED TO GRADUATE, DELAYING PLANS TO GRADUATE.

THEY ARE LOCKED OUT OF CLASSES THEY PLANNED TO TAKE.

AND FOR TEACHERS, YOUR CLASS IS SUDDENLY FULL.

AND THEN NOBODY SHOWS UP ON THE FIRST DAY.

SO YOU HAVE THIS WASTED TIME AND WASTED ENERGY GOING TOWARDS THESE AI GENERATED GHOST STUDENTS WERE ALL THE ENERGY AT COMMUNITY COLLEGES ARE TYPICALLY FOCUSED ON GETTING PEOPLE EDUCATED.

>> THE COMMUNITY COLLEGES ARE THE ONES RESPONSIBLE FOR MAKING SURE THE STUDENTS THAT ARE REGISTERED OR INFECTED HUMAN WHEN THEY ASKED THE STATE FOR MONEY.

WHAT BURDEN REMAINS ON THESE COLLEGES AND WHAT DOES THAT LOOK LIKE RIGHT NOW?

>> THEY ARE DOING HAND-TO-HAND COMBAT RIGHT NOW.

SOME OF THEM ARE DOING MANUAL APPLICATION REVIEWS.

THEY ARE ASKING STUDENTS TO GO TO A NOTARY TO VERIFY THEIR IDENTITY.

THEY ARE ASKING THEM TO COME IN.

THE MORE BARRIERS YOU PUT IN FRONT OF STUDENTS TO GETTING EDUCATED, THE LESS ABLE THEY ARE TO ACCESS THOSE RESOURCES.

THAT IS PART OF THE PAIN POINT HERE.

HOW MUCH FRICTION DO YOU PUT IN THE SYSTEM FOR MAKING PEOPLE ABLE TO GET INTO COMMUNITY COLLEGE?

>> AMANDA GARRETT WITH FORTUNE, THANK YOU SO MUCH.

>> THANK YOU FOR HAVING ME.