If you're a community college student in California, there's a chance that at least one of your fellow students is actually an AI bot robbing taxpayers. Recent data from the California Community Colleges Chancellor's Office suggest that these bots have stolen more than $10 million in federal financial aid and upward of $3 million in state aid between March 2023 and March 2024.
The scam is simple: Bots create AI-generated student profiles, apply for enrollment, and submit minimal online coursework—often AI-generated—to stay enrolled long enough to receive federal and state aid disbursements intended for low-income students. The scammers are known as "Pell runners," who disappear after collecting the $7,400 federal grant.
According to reporting by CalMatters, cases surged after restrictions around financial aid were loosened during the COVID-19 pandemic to make it easier for eligible students to access the one-time grants, which were provided to keep students enrolled. At the same time, coursework was moved online to comply with the state's lockdowns, opening the door to virtual scammers. As early as 2021, the Chancellor's Office estimated that 20 percent of applications were fraudulent. Now, increasingly sophisticated AI tools have made the problem worse, and recent data suggest that around 34 percent of California community college applicants are fake. Despite California allocating over $150 million since 2022 toward cybersecurity to help authenticate students and combat fraud at community colleges, scammers have successfully stolen more financial aid with each passing year.
