When Jennifer Lowe moved to Franklin, she expected the usual new-town hassles: forwarding mail, new commute, maybe a wrong pizza order or two. What she did not expect was a letter telling her she had somehow enrolled at the University of Phoenix and that nearly $2,400 in federal student aid had been taken out in her name.
Lowe, a polymer scientist, says scammers managed to siphon off about $1,000 of that money, leaving her to prove she never applied for the aid and to plow through paperwork with police and lenders. Her story is a local snapshot of a growing nationwide “ghost student” scam that can saddle unsuspecting people with phantom loans and months of bureaucratic headaches.
According to WISN, the letter showed almost $2,400 in federal student aid in her name and indicated someone had enrolled her at the for-profit University of Phoenix. Lowe told the station a fraudster used an old Louisiana address and a nearby phone number to pose as her. She filed a report with the Franklin Police Department and a complaint with loan servicer Aidvantage. Aidvantage accepted her claim, and the University of Phoenix froze the student account while the U.S. Department of Education reviews whether the money will be forgiven or must be repaid. “It seems like they're just trying to drag it out until I have to pay or end up in delinquency,” Lowe said.
Federal investigators now have more than 200 open cases tied to ghost-student schemes, and the government has examined hundreds of millions of dollars linked to this kind of fraud, according to ABC News. Officials and administrators say the shift to remote instruction and wider use of automation and AI tools have made it easier for fraud rings to quickly scale up and hide fake enrollments in plain sight.
How the Scam Works and Why It Is Spreading
In a typical ghost-student setup, scammers piece together fake or stolen identities, file Free Application for Federal Student Aid (FAFSA) forms, enroll in online programs and then wait for the financial aid to drop. Once funds are disbursed, they move quickly to cash out. Some operations even use bots or AI to submit basic coursework so the accounts look just convincing enough to slip past busy administrators.
Federal watchdog reports describe colleges and state systems losing millions to this kind of abuse and detail how new identity-verification checks and third-party fraud-detection services are being rolled out in response, according to the U.S. Department of Education’s Office of Inspector General.
What To Do If Your Name Shows Up on a Loan
If you discover a student loan or enrollment you never signed up for, consumer and federal guidance is clear: move fast. File a police report and create an Identity Theft Report at IdentityTheft.gov. Then contact your loan servicer right away to flag the account as fraudulent.
For federal loans, the U.S. Department of Education offers a Loan Discharge Application: False Certification (Identity Theft) that asks for documentation such as a Federal Trade Commission identity report and a police report. The form and instructions are available through StudentAid.gov. Victims are also urged to freeze their credit with the three major bureaus, review their federal loan history at StudentAid.gov and report suspected fraud through the Office of Inspector General hotline, according to StudentAid.gov and the FTC.
Back in Franklin, Lowe says the hours of forms and follow-up calls have been exhausting. She is hoping that new federal screening tools that analyze applications in real time will catch more of these scams before they hit people like her. Federal and local officials, along with Lowe herself, now urge anyone who gets surprise aid-related mail to check their credit and report it immediately, a warning she shared after her experience, according to WISN.
