Avinash Tripathi is a distinguished analytics evangelist and industry influencer. He has successfully led analytics and data science teams, shaping the data strategy and vision for some of the world’s largest universities, driving business value, and accelerating speed to insights. With over 20 years of experience in higher education, Avinash is deeply passionate about leveraging data to positively impact the sector. As a well-respected thought leader in the field, he advocates for disruptive transformation to address evolving industry needs through advanced analytics and real-time data utilization. Renowned for his expertise in data storytelling, Avinash plays a vital role in guiding top executives on the significance of incorporating data storytelling into analytics-driven initiatives. He emphasizes the crucial role analysts play within data-focused organizations, contributing to their success.
Reports indicate a surge in suspicious college applications, perpetrated by humans and bots using stolen or fabricated identities to secure federal student aid. This scheme not only defrauds institutions but also taxpayers, with incidents escalating due to the widespread availability of stolen personal data. Bad actors exploit this data to forge fake identities or manipulate existing applications, undermining the integrity of admissions processes. Billions of people’s data were published on the dark web around April 8, 2024, from a single breach of National Public Data.
According to Cybersecurity Ventures, global cybercrime costs are projected to skyrocket to $9.5 trillion USD in 2024 and $10.5 trillion by 2025. In 2024, several high-profile data breaches compromised organizations across various sectors. One of the most significant was the MOVEit breach, which exposed the data of 77 million individuals and affected over 2,600 organizations, including U.S. government agencies like the Department of Energy and universities. AT&T also experienced a major breach, with hackers stealing sensitive data from 65 million former customers, including social security numbers. Additionally, Ticketmaster’s breach leaked 560 million customer records, encompassing payment details.
The financial sector was not spared, with Bank of America experiencing a ransomware attack that compromised the personal and financial information of 57,000 customers. Dell was also targeted, with hackers breaching 49 million accounts to obtain sensitive customer data. These breaches highlight the growing threat posed by cybercriminals and the vulnerabilities even large corporations face. They also increase the risk of identity theft and fraudulent applications, especially in institutions like universities where personal information is frequently targeted.
Fraudsters, often called “ghost students” or “Pell runners,” exploit federal student aid programs, collecting loans and grant money before disappearing. In fiscal year 2023, the Department of Education disbursed approximately $114.1 billion to over 9.7 million borrowers, making student aid fraud a growing concern. To combat this, educational institutions and e-learning platforms are increasingly adopting online identity verification tools.
The Escalating Threat of Student Aid Fraud
According to a spokesperson from a community college system, around 25 % of their applications were found to be suspicious compared to 20 % in the previous year of 2021. This increase could stem from tighter security measures catching more fraud and increased federal funding making student aid fraud more appealing. The transition towards hybrid learning, which expanded since the start of the pandemic, has also opened new avenues for bad actors to exploit these programs globally.
Universities face additional challenges due to resource limitations. Budget constraints, staffing shortages, and outdated technology create vulnerabilities in their defenses. The complexity of the FAFSA application itself further complicates the issue, providing opportunities for fraudsters to exploit loopholes and submit false information.
Unseen Threats: The Surge in Fraudulent Applications at Online Universities Post-Data Breach
Despite the surge in suspicious applications at colleges and universities, reporting on this issue remains limited. Suspicious activities in higher education are often underreported to avoid reputational damage or backlash. Online Universities and colleges with their larger application pools and remote verification processes are more susceptible to fraud, including identity theft and credential misuse. The focus in these cases often shifts to internal mitigation measures, such as implementing advanced technology to detect and prevent fraud, rather than publicly reporting the issue. The combination of increasing cyberattacks and evolving fraud tactics means institutions may be overwhelmed by the scale of the problem.
Key indicators of fraudulent financial aid applications include:
- Unusual patterns in address or email usage
- Sudden surges in applications
- Inconsistent borrowing amounts
- High withdrawal rates among students with Parent PLUS Loans (PSL)
- Suspicious FAFSA submissions
- Multiple student refunds going to the same account
- Discrepancies between reported income and loan amounts
- Clean ISIR records despite fraudulent documents
- Varying levels of student engagement based on fraudulent rings
- Register for classes without prerequisites.
- Forged Document Submission
- Identification of copied or pasted content within the application
- Identification of multiple applications originating from the same internet connection within a brief period, suggesting potentially fraudulent activity.
Tools for Detecting and Preventing Fraud
- To protect against student aid fraud, schools are increasingly using identity verification tools. These tools can quickly verify an applicant’s identity by cross-referencing government-issued IDs with selfies and other personal data. Passive signals, such as device information and behavioral patterns, can also help identify suspicious applicants without adding unnecessary friction to the enrollment process.
- Universities can further enhance their protection against fake applications by using advanced technology like artificial intelligence and machine learning. These sophisticated systems are adept at identifying anomalies, in application information or behaviors that could signal fraudulence. Predictive modeling enables institutions to anticipate risks ahead of time and take measures accordingly. By harnessing AI tools to scrutinize amounts of data sets and swiftly detect inconsistencies early on universities can minimize the risk of student progression stemming from deceitful applications.
- Natural language processing (NLP) is another valuable tool for analyzing written content like transcripts or essays. NLP can help detect anomalies and signs of plagiarism that could expose academic credentials fraud. Moreover, NLP can analyze the textual data within applications and social media profiles associated with applicants, identifying inconsistencies or discrepancies that may indicate identity theft.
- Beyond text analysis, biometric authentication techniques, such as voice recognition can enhance identity verification procedures by reducing the chances of identity theft. Behavioral Biometrics can also detect deviations from normal behavior that may signal fraudulent activity by analyzing patterns in user behavior like typing speed, mouse movements, and keystroke dynamics,
- Blockchain technology can play a critical role in ensuring the integrity and security of application data. In parallel, with this effort is process automation (RPA) which boosts productivity by automating verification tasks and reducing human errors. Combining these advancements in technology effectively enables identity and document validation while evaluating potential risks. This integrated approach enhances the defenses of universities by safeguarding their assets and upholding the integrity and equity of their admissions procedures.
Data Breach, Deadlier Deeds:
With universities encountering a shifting terrain of cyber threats and deceptive applications, safeguarding federal student aid has become more critical than ever. Amid the rising tide of cybercrime educational institutions must allocate resources towards security strategies that involve innovative technology and data protection measures. By implementing these safeguards universities can shield their assets, ensure admissions processes, and uphold the credibility of their financial aid initiatives. The ongoing fight against fraud requires continuous modernization and vigilance, ensuring that the opportunities meant to help students are not exploited by bad actors.