The Department of Justice has charged five individuals in the first broad federal crackdown on "ghost students," a scheme where fraudsters steal identities of Americans—primarily high school graduates who never attended college—to fraudulently obtain federal student aid. Using purchased personally identifiable information (PII), perpetrators submit FAFSA applications, enroll in universities and community colleges, and divert excess aid refunds into controlled bank accounts, often employing money mules. To sustain the fraud across semesters, actors use AI to complete applications, coursework, and simulate attendance in virtual sessions. The Department of Education identified over 830,000 potentially fraudulent accounts, with estimated losses near $130 million; $32 million in actual losses is tied to the charged subjects, with millions more suspected. One defendant received 700 fraudulent deposits totaling $1.44 million, another over $1 million across 300 accounts. The FBI and DOE Office of Inspector General traced funds to U.S. and foreign bank accounts and crypto wallets, leading to the seizure of $750,000 in cryptocurrency from a Kenya-linked network—the first such international seizure there. The Trump administration credits new identity verification requirements and automated fraud detection for the breakthrough, though the DOJ suspects the scam has operated since at least 2021. Officials have issued roughly 50 referrals to 26 FBI field offices. Critics warn automated systems risk false flags that delay aid for legitimate students, particularly low-income applicants lacking government IDs, and a June 29–July 6 technical glitch already disrupted fraud evaluations. Colleges may add fees to combat fraud, potentially creating further access barriers.