While not part of the supernatural world, “ghost” students in higher education are an issue that needs to be exorcised from Minnesota’s college and university system.
Reporting by KSTP found that the threat of these “ghost” students — criminal actors who use stolen or fake identities to enroll in online courses at colleges and universities to steal federal financial aid — has “become so prevalent at Minnesota’s largest community college that administrators now say nearly a third of all applications to the school are potentially fraudulent.”
Normandale Community College in Bloomington has processed about 29,000 fraudulent or potentially fraudulent applications over the last few years, according to Dara Hagen, vice president of Student Affairs. “We were seeing probably 42 percent of our applications or so being fraudulent, and now we’re down to about 31 percent.” The college told KSTP that those applications were “flagged for further review before any student aid was disbursed.”
Systemwide, Minnesota State — which includes Normandale and 32 other colleges and universities — flagged 2,696 fraudulent or potentially fraudulent financial aid applications for the 2025-26 school year. That’s down from the 7,700+ suspicious applications flagged the year before, but it’s still a lot of fraud.
Jacob Rosenbacher, age 32, has experienced this firsthand. His name and personal information were used to enroll at Normandale and obtain a federal student loan of about $9,000. The Chicago resident told KSTP that he had never heard of Normandale or Bloomington, Minn.
“My credit dropped 168 points overnight.
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And what Normandale, in my view, didn’t do is they didn’t check my identity against anything. That’s all they would have had to do. They would have had to just Google me.”
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Rosenbacher says a form letter the college sent to his ghost student at the end of the semester should have been seen as a red flag.The “academic and financial aid warning notification” noted that the student using Rosenbacher’s identity had a GPA of “0.0” but added, “We believe you can do this, and we are here to help you succeed.”
The 0.0 GPA wasn’t an immediate red flag for administrators. “We do have students who end up stopping out that are real students,” Hagen told KSTP. “And so, at some point there will be outreach.” In Rosenbacher’s situation, the fraud wasn’t discovered until after the federal student aid was accessed
Enrollment fraud has become a nationwide problem, with community colleges particularly susceptible. Open enrollment and online courses can make it easier for fake students to get accepted undetected.
During the 2025 special legislative session, Minnesota lawmakers mandated a working group to tighten up the application process, which my colleague Josiah Padley covered here. They approved $3 million in one-time funding for identity verification across the Minnesota State system.
This money, as of KSTP’s reporting, is still being allocated toward a vendor and pilot program. The working group has also produced an Enrollment Fraud User Guide for all 33 state colleges and recommended becoming a standing legislative committee that would issue an annual fraud report.
But what about the money that has already been lost? U.S. Secretary of Education Linda McMahon has claimed that 1,834 ghost students in Minnesota received $12.5 million in taxpayer-funded aid.
That’s real money that was taken through a real gap in the system, and not every institution has had the same problem.
As my colleague Josiah Padley documents here, the University of Minnesota Twin Cities told legislators in February that it wasn’t seeing meaningful fraud. One reason is that the U manually verifies every applicant’s final high school transcript. It also charges an application fee to discourage bot-driven submissions.
Minnesota’s private colleges told legislators much the same thing. Schools that had seen fraud attempts had seen only “low levels” of it. Their admissions processes for in-person residential programs don’t give remote fraudsters much to work with.
With $3 million in new funding, the Minnesota legislature and Minnesota State owe taxpayers a public accounting of how many ghost students have been caught, how much they have cost so far, and whether the new identity-verification system will get community colleges closer to what the U and private colleges have already managed on their own — without the added dollars.
Taxpayers shouldn’t have to guess whether the new money is working.