Fraudulent student aid and related scams are impacting veterans and other military-connected students. The U.S. Department of Education reported approximately $90 million in erroneously dispersed funds in 2025 across all demographic populations.
While there is no official breakdown of the veteran demographic, the U.S. Department of Justice reported the indictment of five individuals for defrauding nearly $20 million just last year. They are specifically charged with operating schools that provide non-degree cybersecurity and computer coding courses, where VA auditors found false enrollment records and other concealed information to justify tuition costs at the annual cap for short-term courses. Veterans commonly pursue these fields and comprise a significant portion of the cybersecurity workforce.
There have been other past scams and fraud schemes targeting veteran education benefits and federal aid recipients. Ineligible or even deceased federal aid recipients, in which $30 million in fraudulently disbursed aid was reported in the past three years, have led to additional screening and detection systems to safeguard individuals.
Though intricate schemes have been used to steal money, there is also a rise in the use of bots, AI, and fake applicants. In one notorious example involving the California Community Colleges, “ghost students” are being used to create fake student identities by stealing real ones or creating fake ones. This resulted in the loss of at least $13 million in both state and federal funds in 2025. The Federal Bureau of Investigation has been reviewing widespread similar cases in other states.
Impact on Military-Connected Students
Unfortunately, scammers targeting military-connected students are not new. In one high-profile case last year, a career services manager serving veterans pled guilty to defrauding nearly $3 million. In other scams during 2025, the VA shared reports of the most recent “overpayment” scams, where they impersonate the VA to get money redirected to them.
Another known scam is where predatory organizations aggressively pursue veterans with contracts and fees to assist them with claims procedures. These bad actors misrepresent themselves and tend to rush recipients into providing their credentials or other personally identifiable information.
The VA published the following examples of education and career scams to help veterans catch signs of fraud before it’s too late.
- Job Boards or Advertisements targeting specific demographics may be misleading or fake and require personal information or money to get the job. You can find free, official information about federal jobs at USAJOBS.gov, FedsHiresVets.gov, and CareerOneStop.org. Your State’s Department of Labor may have job listings, contacts for local job offices, and resources for counseling and referrals.
- Educational institutions may promise immediate student loan forgiveness or debt cancellation to entice Veterans to enroll in classes. For most borrowers, Loan Forgiveness is only available through programs requiring many years of qualifying payments or other qualifying criteria. Here is a List of Student Debt Relief “Do’s and Don’ts” to help borrowers avoid scams.
- Educational institutions may “guarantee” Veterans a scholarship in exchange for a redemption/processing fee.
- Veterans may be promised a scholarship and financial aid under the guise of high-pressure sales pitches where they feel pressured to pay immediately or risk losing the so-called “opportunity.”
- Veterans may be promised incentives such as free laptops, gift cards, or other “freebies” for enrolling in courses.
What To Do
Since the Fall Semester in 2025, higher education institutions have been required to verify the identity of first-time students who complete the Free Application for Federal Student Aid to protect the integrity of Title IV and HEA programs. Fraudulent schemes are proportionately aimed at community college networks due to lower tuition rates and asynchronous online classes, which have become a popular modality for learning in nearly every higher education institution.
This is because AI tools can be exploited to overcome weak identity systems and processes that may not detect suspicious accounts. Colleges and universities are having to increase their resources to combat education fraud.
Veterans can take specific steps to protect themselves from becoming victims of fraudulent activity. The VA posted the following:
- Choose GI Bill Approved Schools. Use the WEAMS Institution Search Tool to find GI Bill-approved schools.
- Use the GI Bill Comparison Tool. Compare the benefits you’ll receive at different schools.
- Learn about the Principles of Excellence Program. The program requires schools that receive federal funding through programs such as the GI Bill to follow certain guidelines.
- Check out the National Resource Directory Database. The database provides validated resources that support recovery, rehabilitation, and reintegration for service members, Veterans, family members, and caregivers. Scammers may try to appear legitimate by using official-sounding names, logos, websites, or showcasing a false affiliation with the VA.
- Find schools that take part in the Yellow Ribbon Program. The program can help you pay for school costs not covered by the Post-9/11 GI Bill.
See Federal Student Aid Avoiding Student Aid Scams and Veterans Benefits Administration Fraud Prevention for information on how to recognize scams and what to do to stay safe.
