<ul data-eligibleForWebStory="true">Chatbots are posing as students to collect financial aid and attending online classes, impacting real students.Analysis revealed 1.2 million fraudulent applications in California, leading to 223,000 suspected fake enrolments.Identity theft protection software is crucial to safeguard against such attacks, especially after a data breach.Ghost students, operated by chatbots, are accessing online classrooms and collecting financial aid funds.Online classrooms are being filled with chatbot 'students', pushing out real students and causing financial losses.Criminals have stolen at least $11 million in financial aid from California colleges, with little chance of recovery.AI scams are contributing to a surge in identity theft and fraud, with hackers utilizing advanced tactics.Scammers often exploit data from breaches to apply for grants and loans using authentic credentials.The Federal Student Aid Office faced significant staff reductions in 2025, impacting fraud investigation efforts.