California community colleges are combating financial aid fraud with innovative artificial intelligence (AI) technology. Over 80 of the state’s 115 colleges are implementing an AI model to detect fraudulent students, marking a significant shift in their defense against scammers who have embezzled millions in federal and state aid. Initially piloted at the Foothill-De Anza Community College District, AI tools now identify red flags such as shared phone numbers and unusual course patterns, effectively doubling the detection rate compared to human staff. In 2024, colleges lost over $11 million to fraud, with AI expected to lessen these losses in the future. Additionally, collaboration with the California DMV will streamline identity verification for genuine students. With a layered approach using AI and updated identification methods, California colleges aim to significantly reduce fraud, ensuring real students have access to valuable resources. As more institutions adopt AI, its learning capabilities will enhance fraud detection across the system.
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