The bill, approved on Thursday, April 16, by the Higher Education Finance and Policy Committee, includes funding for the new technology.
With ghost students, “the taxpayers are getting fleeced and the real students are missing out on opportunities,” said Rep. Dan Wolgamott, DFL-St. Cloud, the co-chair of the committee.
Ghost students, criminals who use fake or stolen identities to enroll in classes and pocket financial aid dollars — mostly at two-year colleges — are on the rise over the past three years, said Craig Munson, Minnesota State’s chief information security officer. With its 33 schools, Minnesota State is the largest system of colleges and universities in Minnesota.
“Colleges and universities across the nation have quickly become a primary target for fraudsters who believe that both private and public school systems tend to be ... much slower in adopting cyber security defenses,” Munson said.
The issue has garnered national attention. In December, U.S. Education Secretary Linda McMahon sent a letter to Gov. Tim Walz scolding him for several issues, including ghost students. At Minnesota colleges, she said, 1,834 fraudsters had received $12.5 million, paying some to the schools and pocketing the rest. She said her department had enhanced its fraud controls.
In Minnesota, Munson said the new state funding would pay for “automatic identity proofing” software — the gold standard for stopping ghost students. The program uses biometrics, document authorization and behavioral analysis to figure out if students are real.
Colleges using the software have seen a 50 percent reduction in fraud within two weeks of it going live, Munson said. It would also reduce the amount of staff time spent detecting ghost students, provide better data about enrollment and faculty workload needs and make registration faster for students, who must wait for staff to verify their identities.
Students would submit the same information they do now when registering for college, plus potentially a photo ID and a selfie photo or video. Artificial intelligence would determine whether the two images match, Munson said.
Munson also noted that a new enrollment fraud working group, which was required by a 2025 bill, has published an enrollment fraud prevention user guide. Their work has helped Minnesota State make significant progress in combating fraud by implementing specific safeguards.
“These changes are manual in nature, however, and the needed speed to adapt to the fraudsters’ changing tactics takes significant effort for our staff,” he said.
Minnesota State is more vulnerable to ghost students because it’s easier to get in than other colleges and universities, Munson said. Wolgamott said that only Minnesota State was involved in legislation discussions because the school system has been “gathering data on the issue the longest.”
“We are hoping that they can try this model and get back to us with feedback on how to implement [it] at other schools,” he said.
Officials from Minnesota State have warned community and technical colleges to look out for ghost students, who can pocket hundreds or thousands in financial aid dollars before schools figure out they’re not real students.
Fraudsters often enroll in online, asynchronous classes — courses where students can access lessons and activities whenever they want — with no intent of learning or earning a degree.
They try to make it through the early days of a course without being found out, doing the bare minimum in classwork until financial aid money is disbursed, usually about 10 days into the semester.
Students might drop the class at that point or stick around, failing the class. They may keep enrolling in classes using the same name or identity until they’re suspended or otherwise kicked out, Minnesota State instructors said.
The scammers, often based in Asia or Africa, try to sign up for classes on a large scale, registering hundreds or thousands of identities at once, Munson said. Most are stolen from real people.
Once authorities learn the swindlers’ strategies, the swindlers change their methods, usually every six months, Munson said.
Other types of enrollment fraud include using stolen identities to gain access to software or obtain an email address from a college. Fraudsters who obtain email accounts may sell them or try to scam actual students into giving them money or data.
Munson has been deliberately mum about statistics on ghost students in order to conceal that information from scammers. But he was pressed at an April 9 hearing by legislators, who mentioned the $12 million estimate.
“Our numbers are much less than that, and that was a statewide number,” he said.
Previously, he said, Minnesota State had detected thousands of attempts, but explained that didn’t mean thousands were actually getting through.
Minnesota is a bit ahead of the curve in addressing the problem, he said. Their past computer programs didn’t work well because they used credit histories to establish that college students were real; many students under age 25 didn’t have that, Munson said. But new software is much more effective.
Some legislators raised concerns about the use of biometrics to verify students.
“I’m all about making sure we prevent fraud ... but the second I heard the word ‘biometrics’ my skin got a little tingly,” said Rep. Ginny Klevorn, DFL-Plymouth.
Munson said there would be no fingerprints or retina scans used, and the software won’t match faces to outside data like other biometrics technology does.
Other lawmakers asked how long Minnesota State would hold onto students’ information. Munson said officials would keep it for a “very limited amount of time.”
There would be alternate ways to prove one’s identity, with the goal of balancing accessibility for legitimate students with fraud protections.
Rep. Marion Rarick, R-Maple Lake, asked whether new software was needed when the state is already using similar technology to verify identities with the Paid Family and Medical Leave Act.
Munson said Minnesota State was open to seeing what the state is doing, and is also looking into software used by the state of California, he said.
Several lawmakers said the software was a good idea or would pay for itself.
“Clearly the ghost student problem is a vector of fraud that we need to get a handle on,” said Rep. Kristin Robbins, R-Maple Grove.
©2026 The Minnesota Star Tribune. Distributed by Tribune Content Agency, LLC.
