University of Phoenix

A Phoenix woman, Agatha Milot, discovered she had roughly $20,000 in student loans and grants taken out in her name at the University of Phoenix, a school she never attended. Despite filing a police report, freezing her credit, and notifying both the school and loan servicer MOHELA, she has struggled for two years to get the fraudulent loans discharged, damaging her credit in the process.

Her case reflects a growing problem federal officials call "ghost student" fraud, in which organized groups use stolen identities to enroll in classes and collect federal financial aid with no intention of attending or repaying. The Department of Education's Office of Inspector General says more than $350 million in such fraud has been adjudicated over five years, with actual losses likely higher. Some schools, like Excelsior University, have adopted multi-factor authentication and identity verification to block bad actors. Congress is considering the No Aid for Ghost Students Act of 2026, which would mandate a federal identity-fraud detection system for FAFSA applicants; it has passed the House and awaits Senate action.