Millions in Student Aid Lost to Fraud at California Colleges—Not at Santa Barbara City College

SANTA BARBARA, Calif. – Millions of dollars have been lost to fake applications submitted to community colleges across California, but that is not the case at Santa Barbara City College.

Despite 87% of applications received by SBCC in March being identified as fake, no student aid has been distributed to fraudulent applicants, according to María L. Villagómez, Ed.D., assistant superintendent and vice president of academic affairs.

“It is something that requires almost an all-hands-on-deck kind of approach because, systematically, we don’t have the capacity to do those detections automatically,” Villagómez explained.

At SBCC, fraudulent applications tend to target late-start, asynchronous online classes, where open seats are more common.

To apply to a California community college, applicants submit a form through CCCApply, the centralized application system used by all 116 colleges. Each institution is then responsible for screening applications to identify fraud.

SBCC uses a multi-tiered process. An automated system flags applications with suspicious characteristics, such as names written in all uppercase or lowercase, invalid addresses or phone numbers, and unusual email domains. Admissions staff manually review those flagged, and faculty are asked to remove no-show students.

"We have to be very judicious at determining when we drop a potential bot and when we choose not to, because then we're risking dropping an actual student and that is counterproductive," Villagómez said.

In February, SBCC received nearly 2,500 applications. Of those, just over 550 were legitimate. Officials said 77% were identified as fraudulent, and only 14 fraudulent actors made it past initial screening, all of whom were later removed from class rosters.

While no fraudulent students received financial aid, the vetting process has placed a burden on staff. Villagómez said no overtime is being used, so other priorities have been delayed.

"Are we paying in other ways? Absolutely! It does shift the priorities for those teams, for those areas and something's got to give."

Villagómez emphasized that artificial intelligence is both a challenge and a tool in the ongoing effort to combat fraud.

“It’s a double-edged sword,” she said. “AI helps the bots, but it also helps us catch them.”

Allan Hancock College in Santa Maria has a similar multi-tiered screening system, but some fraudulent aid has been distributed.

“So far in the 2024–2025 academic year, only one-tenth of one percent (0.01%) of financial aid disbursed was found to be fraudulent, out of the $16.7 million distributed to students,” a college representative said.

That amounts to approximately $1,670.

Villagómez said more needs to be done at the state level.

“We need a permanent solution, not just temporary patches,” she said. “As long as there are huge financial incentives, there will continue to be problems.”

Despite the state allocating more than $150 million since 2022 to improve cybersecurity at community colleges, CalMatters, a nonprofit news organization, reports that fake community college students have stolen more than $10 million in federal financial aid and more than $3 million in state aid over the last 12 months.

After the CalMatters report, nine Republican U.S. representatives asked U.S. Education Secretary Linda McMahon and U.S. Attorney General Pam Bondi to investigate financial aid fraud at California’s community colleges.

A representative from the California Community Colleges Chancellor’s Office told News Channel in an email this week that officials from the U.S. Attorney General’s Office and the FBI have expressed interest in supporting efforts to investigate and identify potential fraud.

The call to action comes as fake applications to community colleges surge across the state. Between 2021 and 2024, the percentage of fake applications rose from 20% to 25%. In the past year alone, one-third of all applications were fraudulent.

This week, the California Community Colleges Board of Governors voted to require all students to verify their identity—a step that was previously optional. The board also debated imposing a modest application fee (no more than $10) to deter mass fraudulent submissions but ultimately rejected the idea after more than two hours of discussion. Instead, staff were directed to “explore” a future fee policy, CalMatters reports.

Villagómez said she hopes to see improved detection tools, clearer statewide policies, and stronger institutional support to help colleges combat fraud more effectively.