U.S. Secretary of Education Linda McMahon on Monday sent a sharply worded letter to Minnesota Gov. Tim Walz accusing his administration of widespread oversight failures that allowed large-scale welfare and federal student aid fraud, including abuse of college aid programs by so-called “ghost students.”
In the Dec. 15 letter, McMahon said Minnesota’s lax oversight attracted international fraud networks and eroded trust between state and federal authorities. She cited findings by the Department of Education that fraudulent college applications were heavily concentrated in Minnesota, involving individuals who were not identity-verified, often did not live in the United States, or did not exist.
According to McMahon, 1,834 ghost students in Minnesota received roughly $12.5 million in federal grants and loans, with funds split between participants and cooperating colleges despite no actual enrollment. She said the department responded by imposing enhanced fraud controls, including mandatory identity verification, blocking more than $1 billion in attempted aid theft tied to international fraud rings and AI-generated applicants.
The letter also alleges Minnesota has become a focal point for fraud across federal housing, food assistance, small business, elder care, and disability-related programs, with state leadership failing to intervene. McMahon further criticized Minnesota political leaders, including a sitting member of Congress, accusing them of benefiting politically while advocating policies such as student debt cancellation.
McMahon concluded by accusing Walz of dereliction of duty, warning federal agencies under President Trump would continue pursuing accountability, and formally calling on the governor to resign, arguing the state needs new leadership to restore integrity to public benefit programs.
