Policy Errors at the Root of California Community College Enrollment Fraud
California’s community college system continues to struggle with massive enrollment fraud, costing taxpayers millions in improper financial aid payments and raising hurdles to real students trying to complete their programs. California community colleges are especially vulnerable to fraud because of two progressive policy imperatives: tuition-free education and protecting undocumented immigrants. While providing free education without requiring proof of legal residency status sounds idealistic, implementing these ideas opens the door wide to waste, fraud, and abuse.
Enrollment fraud isn’t new but exploded during the COVID-19 pandemic, when online learning reduced oversight, allowing “ghost students” to enroll, collect aid, and vanish. Unlike selective systems like the University of California, community colleges admit nearly anyone, making them prime targets. By 2021, an estimated 20% of applicants were fraudulent, rising to 25% by January 2024 and 34% by late 2024, with AI driving more sophisticated scams. Reported losses have amounted to tens of millions of dollars, but could be understated given challenges in identifying fraudulent registrations.
Enrollment in California’s community colleges has been on a downward trajectory, dropping from a peak of 2.83 million in 2008-09 to a pandemic low of about 1.83 million in 2020-21, with only partial recovery to 2.1 million in 2023-24. This decline, driven by demographic shifts and questions about the value of higher education, may reduce incentives for administrators to aggressively root out fraud. By inflating headcounts, “ghost students” can help secure funding in a system where state allocations are tied to enrollment numbers.
The California College Promise Grant and California Promise program waive fees and tuition for many applicants and enrolled students, meaning Pell Grants (of up to $7,395 yearly) go directly to textbooks and living expenses. Sanctuary policies under Senate Bill 54 (2017) limit immigration enforcement cooperation, enabling undocumented students to access state grants with limited verification. These policies, while well-meaning, lower barriers, letting scammers exploit lax oversight. Exacerbating the situation were pandemic-era federal policies that relaxed verification for those submitting FAFSAs (Free Applications for Federal Student Aid).
Scammers face no application or tuition fees, enrolling with fake identities—often AI-generated—to claim aid and disappear. Many are caught by community colleges using their own AI tools, but many get through and register for classes. These “ghost students” take up seats, limiting class access to real students. For example, in Reddit discussions about City College of San Francisco, one user notes, “They’re called ghost students and it’s a scam to collect financial aid. It’s f**ked because they sign up super early so actual students can’t sign up and have to attend the first few classes hoping they can get credited for them,” highlighting how fraud blocks access to classes.
Community college enrollment fraud mirrors broader patterns of benefit abuse seen in recent years, such as California’s unemployment insurance scandals, where lax pandemic-era rules enabled criminals to siphon billions through fake claims. Similarly, scammers have been convicted of taking out fraudulent loans under the COVID-19 Paycheck Protection Program and of filing fraudulent Medicare and Medicaid programs. These cases, like the community college aid scams, stem from generous, low-verification programs often rushed during crises, underscoring how good intentions too often lead to the waste of taxpayer funds.
As Dr. Jeannie Kim, president of Santiago Canyon College, noted in a California Insider interview, “1.2 million fake applicants applied last year to community colleges in California. And right now, there are a number of fake students out there in our community college system to the point where kids cannot take their classes because these fake students are taking their spots.” This stark reality emphasizes the urgent need for reform.
To fix this, California community colleges should start modest application and registration fees obliging potential fraudsters to have skin in the game. All students should be required to pay at least a few dollars per credit to take classes, money that fake students would lose if they are discovered by instructors and dropped.
In-person registration with ID verification should become the default, with special accommodations available only to those with serious disabilities.
Free education for the documented and undocumented alike sounds idealistic but is leading to the waste of scarce taxpayer funds. The benefits of community college should be limited to real students who value the education enough to physically show up at the registration office and pay at least a modest amount of money for the privilege.
Marc Joffe is a Visiting Fellow at California Policy Center.