Yesterday, the House Higher Education Finance and Policy Committee reviewed its options to exorcise “ghost students” from Minnesota’s college and university system.
The poltergeist problem isn’t new. During the 2025 Special Session, lawmakers were so concerned about the fraud that they mandated the creation of a working group tasked with shoring up the application process. At the time, Joe Haker, a history instructor at Century College in White Bear Lake, gave testimony to the Minnesota Senate. He had found out in 2023 that 15 percent of his students were “basically an organized crime ring…The problem has worsened from there.”
Who were Joe Haker’s students? They were what’s become known as “ghost students”: fraudsters, typically international, that apply for colleges under false or stolen identities while never intending to attend or gain a degree. The digital applications are often made easier by AI. The fraudsters portray themselves as in need of significant financial aid, wait for that aid to be disbursed, and then pocket the extra funds. They can also steal and sell student technology resources.
Fraudsters usually target fully online programs and community colleges, as it is easier for false students to slip by undetected. Mark Grant, with the Minnesota State College Faculty, said yesterday that some poor-quality work submitted by foreign ghost students is unfortunately indistinguishable with the legitimate work of some struggling students, making fraud discernment difficult for professors.
The enrollment fraud working group presented a recommendations report yesterday to the committee. Craig Munson, chief information security officer for Minnesota State, testified that the working group had created an Enrollment Fraud User Guide for Minnesota’s state colleges and universities. The User Guide, focused on cybersecurity and technical recommendations, was designed to be used by all 33 Minnesota state colleges and universities.
The working group recommended that the legislative committee expand the collaboration between higher education and the legislature by formalizing the fraud group as a standing committee and mandating a yearly fraud report to the legislature. They also recommended that fraud awareness training be provided to students and faculty members, that institutions be required to adopt the suggestions made in the Enrollment Fraud User Guide, that continued attempts at collaboration be made between the state and federal government, and that equity impact assessments take place before implementing any safeguards.
The recommendation that invited the most questions, however, was the request that the legislature allocate funding to acquire and implement an automated identity proofing system across Minnesota State Colleges and Universities. This system would represent a $1-1.5 million annual allocation.
Munson was unable to provide the exact number of ghost students, and was also unable to provide an estimate of how much money ghost students have siphoned from Minnesota. Citing security concerns, he noted that he would provide the scope and cost of the fraud offline.
Fraud attempts have plagued many institutes of higher education across the country, with an uptick after lax COVID-era rules that allowed most students to fill out the FAFSA and access financial aid without showing an ID. The U.S. Department of Education has announced that it plans to continue implementing fraud prevention efforts throughout 2026, and that it prevented $1 billion in fraud during 2025. The timeline (and therefore scope) of federal fraud originating in Minnesota has not yet been precisely announced. In December 2025, Education Secretary Linda McMahon reported that “In Minnesota, 1,834 ghost students were found to have received $12.5 million in taxpayer-funded grants and loans.”
Meredith Fergus, financial aid and tuition analyst at the University of Minnesota Twin Cities, informed legislators that her admissions office wasn’t seeing high amounts of fraud. In addition to the office’s regular FAFSA ID check processes, the U’s Twin Cities staff manually verifies each student’s final high school transcript (proving high school graduation) in the summer before classes begin. Additionally, the requirement of an application fee or application waiver submission strongly discourages bots.
Paul Cerkvenik, president of the Minnesota Private College Council, similarly updated legislators that the majority of the 18 institutions represented by the Minnesota Private College Council had experienced no fraud. The institutions that had experienced fraud attempts had only experienced “low levels” of attack. Cerkvenik noted that the private programs he represented had similarly rigorous admissions processes to the University of Minnesota – Twin Cities. Additionally, most of Minnesota’s private programs are in-person and residential, depriving fraudsters of the opportunity to move solely digitally.
If it is possible to combat ghost student fraud by copying successful admissions practices at the U and at private colleges, then Minnesota’s taxpayers will likely breathe a sigh of relief. The lack of public information about the scope of lost state funds creates a barrier to accurately weighing the pros and cons for the proposed $1-1.5 million annual allocation to implement an identity proofing system.
Regardless of whether or not legislators choose to pursue all of the working group’s recommendations, it does seem that a quality guidance document (the Enrollment Fraud User Guide) has been created and released to the state’s 33 colleges and universities. The working group will continue to meet weekly to share strategies and concerns. These are strong steps towards rigorous administrative coordination and careful enrollment policies.
