COVID brought a rush of emergency aid programs that weren't very well thought out. In this case, the aid targeted at students likely came through the HEERF, or Higher Education Emergency Relief Funds. Some of the programs are listed here: https://www2.ed.gov/about/offices/list/ope/crrsaa.html
The reason these are ripe for fraud is that in many cases they were implemented as direct deposit transfers directly to registered students. They were implemented without checks or controls in order to get the money out ASAP, so anyone who registered as a student and entered the correct information to qualify could get one of those direct deposits.
As far as I can tell, some of the implementation details depended on the college. Scammers likely tried different colleges until they discovered a system that didn't verify anything (California Junior College System) and then started filling out forms to collect the direct deposits.
The fact that scammers are registering with obviously fake names like "Barack Obama" suggests that zero confirmations are being performed at all before this money is distributed.
The reason these are ripe for fraud is that in many cases they were implemented as direct deposit transfers directly to registered students. They were implemented without checks or controls in order to get the money out ASAP, so anyone who registered as a student and entered the correct information to qualify could get one of those direct deposits.
As far as I can tell, some of the implementation details depended on the college. Scammers likely tried different colleges until they discovered a system that didn't verify anything (California Junior College System) and then started filling out forms to collect the direct deposits.
The fact that scammers are registering with obviously fake names like "Barack Obama" suggests that zero confirmations are being performed at all before this money is distributed.