In an unsettling trend, a new breed of scam artists known as “ghost students” are exploiting the education system by stealing identities to enroll in schools, securing federal loans, and then vanishing with the funds. Assistant Inspector General for Investigation at the U.S. Department of Education, Jason Williams, warns that individuals might fall victim to these schemes without realizing it.

“These fraudsters are not repaying the loans they take out under stolen identities,” Williams explains. “Individuals unknowingly find themselves saddled with debt to the U.S. Department of Education. It’s often only when they receive an unexpected letter from the department, a loan servicer, or the IRS that they discover they owe money for loans they never took out.”

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Community colleges, known for their open enrollment policies, are particularly susceptible to these scams. Alarmingly, some institutions report that over a third of their applicants in recent years were fraudulent. “In many cases, individuals are enrolling in multiple schools simultaneously and receiving financial aid from each,” adds Williams, highlighting the extensive nature of these schemes.

A poignant example of this issue comes from Murat Mayor, a 58-year-old resident from suburban Washington, D.C., and his teenage son. While seeking legitimate college financial aid, they discovered their identities had been hijacked. The imposters had already enrolled them in classes at community colleges across the nation.

Murat Mayor, a 58-year-old suburban Washington, D.C. man, and his teenage son discovered they were victims. They were applying for college financial aid, but someone had beat them to it, stealing their identities and signing them both up for classes at community colleges across the country.

“We noticed that there were a lot of activity. There are a lot applications, loan applications, grant applications,” Mayor said.

“There are many ways people learn they are a victim of ID theft. Sometimes, they may check their credit report and notice an account they don’t recognize. So, you can get a free credit report from annualcreditreport.com. If you don’t recognize an account, that could be a sign you are a victim of ID theft,” said Federal Trade Commission Midwest Region Director Jason Adler.

Whether you’re a student or a senior, Adler says the best way to protect yourself is to freeze your credit online for free with the credit bureaus. However, if you’re a minor, you may have to call all the credit bureaus, and if you’re 16 or under, call with a parent, and ask them to “create a credit file.”

“The way it works for minors is, the credit bureau will create a credit file for the first time and put the freeze in place,” Adler said.

Eva Velasquez from the Identity Theft Resource Center says while freezing credit can help stop loans from being distributed, lenders and colleges also need to improve the verification process.

“They want to create access and make it easy for students to enroll. And I understand that. And that is an important piece of it, but you also want a little bit of friction, because you want to make sure that person is who they say they are,” Velasquez said.

But the federal government says scammers often use artificial intelligence to expand their reach and circumvent fraud detection controls.

“These bad actors take core identity credentials that can belong to someone like, you know, Social Security number, a driver’s license number, name, date of birth, that type of information. And then they mix it with fake information, like maybe a bank account, where they want the funds to be deposited,” Velasquez said.

The Identity Theft Resource Center and the FTC can help you fight identity theft for free:

According to the Department of Education’s Inspector General, the federal government has lost more than $350 million to ghost student scams with more than 200 active investigations nationwide.

For more of ABC’s investigation into ghost students and the nationwide rise of financial aid scams, tune in to Good Morning America on Wednesday morning and check out ABC News platforms throughout the day.