You Fixed the First Problem

Who’s Watching the Next Three?

Here’s a question that no one in higher education seems willing to sit with long enough to answer honestly: What if the decisions meant to save your institution are actually the same ones that make it most vulnerable, not just once but in unpredictable, cascading ways?

Not vulnerable to budget cuts or enrollment decline. However, susceptible to the kind of cascading, compounding consequences that only become apparent after the initial problem seems resolved. These consequences often lead to a second and third wave of problems that you were never staffed, funded, or prepared to handle, by the time they are clearly visible.

I’ve been contemplating this since a recent conversation with a higher education leader who grew up on three continents, served in the U.S. Army, and now manages a community college district in one of the most complex environments in American public education. His perspective stuck with me: in his words, you think you’re solving a problem, but are you really addressing it? Or are you just shifting it elsewhere?

That leader, Lee Lambert, Chancellor and CEO of the Foothill–De Anza Community College District, spent his formative years navigating the world in a way that most leadership programs never teach. Born in Seoul, raised across three continents, and shaped by the U.S. Army’s rigid command-and-control hierarchy before finding his footing at a college where everyone was on a first-name basis, he learned to relentlessly scan for what comes after any apparent solution.

What struck me most in our conversation was not his résumé. It was his instinct for what the military calls second and third-order effects, the recognition that every decision, solution, and innovation produces downstream consequences that remain invisible at the point of origin.

This is not a theoretical concern. It has arguably become the central operational reality of American higher education right now.

Consider the sequence. When COVID-19 forced institutions to move their operations online almost overnight, it was, by most accounts, a necessary and often heroic pivot. Colleges that had spent years debating the merits of digital delivery suddenly had no choice.

Within weeks, leaders shifted online learning from a strategic option to an essential requirement. For many institutions, especially community colleges with open-access missions, the digital shift succeeded. Students remained enrolled. Faculty completed courses.

The system held.

But the system also developed in ways almost no one was ready for.

The same digital infrastructure that kept education accessible during a global crisis also opened the door to something much more harmful. As Lambert told me plainly, the fraud problem is huge, but it results from our adoption of online learning and digital tools. These tools created new opportunities for exploitation, not because the technology was flawed, but because leaders never established the supporting systems needed to fully leverage what the technology enabled.

The Ghosts That Followed the Pivot

Earlier this year, I wrote about Ghost Students and the mounting evidence of sustained, negative impact on students and institutions.

In brief – If you haven’t yet heard of the term “ghost students,” you will. An ABC News investigation revealed that scammers using stolen or fake identities to enroll in online classes and steal financial aid have become a widespread crisis affecting almost every community college in the country. The process is simple but deeply troubling: criminal networks, many operating internationally, flood community college enrollment systems with AI-generated applications made with fake identities. They register for courses, apply for Pell grants and federal loans, and disappear once the money is disbursed. In some cases, they even submit AI-generated homework to avoid detection long enough to collect the funds.

The scale is staggering. Fortune reported that at some institutions, between 20 and 60 percent of student applicants have been identified as fraudulent, and that approximately $90 million in federal aid was disbursed to ineligible students, including roughly $30 million traced to the stolen identities of deceased individuals. Over the past five years, federal agencies have investigated more than 350 million dollars in fraud connected to ghost student schemes and are currently pursuing more than 200 open investigations nationwide.

Lambert’s framing helps illuminate this threat: the financial losses, significant as they are, represent only the first level of impact. The second and third levels of effects are what should keep institutional leaders awake.

The Day After the Problem Has Been Solved

When ghost students flood an online class, they not only steal financial aid but also take up seats. Fortune reported that one community college filled a 50-person online class in minutes, with over 100 students on the waitlist, and only six of the enrolled students turned out to be real people seeking an education.

Think about that for a moment.

A single parent who rearranged their work schedule to take a required course gets locked out because the seat was occupied by an algorithm.

A first-generation student trying to complete a certificate delays graduation by a semester because the section was full of fake identities. These are not just abstract consequences. They show up as enrollment data points that appear as attrition, stopout, or the quiet departures institutions track in spreadsheets, but rarely connect back to the root cause.

Protiviti’s analysis of the ghost student phenomenon found that its impacts go well beyond direct financial loss. They include compliance risks that could threaten an institution’s federal aid eligibility, reputational harm that diminishes stakeholder trust, and significant operational disruptions as faculty and staff dedicate time to managing enrollments for students who do not exist. The firm highlighted that penalties for noncompliance with federal requirements vary greatly, and publicized fraud cases can have long-lasting effects on an institution’s credibility.

And then there is the human cost that rarely appears in policy briefs. Lambert was open about this during our conversation: the work of identifying and fighting fraud taxes employees in extraordinary ways. People who entered higher education to help students learn and grow now spend much of their day hunting for synthetic identities and verifying whether the person on the other end of a FAFSA application actually exists.

That is not what they signed up for, and the resulting burnout is real, measurable, and growing.

The Leadership Problem Underneath the Technology Problem

What makes Lambert’s perspective so valuable is that he does not view the fraud crisis as a technology issue. Instead, he considers it a systems issue. Within that systems framework, he identifies something even more essential: a leadership story.

Lambert clearly distinguishes between management, leadership, and stewardship. Management addresses immediate issues. Leadership determines the future course. However, stewardship, as he describes it, demands more: the willingness to trust the institution for those who are not yet here, and to make decisions that consider their interests, even when they are uncomfortable.

In practice, this meant being willing to publicly admit that his institution faced an issue. Not quietly, not through internal channels, but openly. This goes against the typical instinct of most institutions, which, as Lambert noted, tend to portray everything as perfect. His point is that you can’t fix a problem if you refuse to acknowledge it. And you certainly can’t predict the second and third-order impacts of a problem if you’re still pretending the first one doesn’t exist.

Lambert pointed to the Stockdale Paradox, the idea that survival depends on never confusing faith in a positive long-term outcome with a refusal to face your current reality. The concept originated from a prisoner of war’s experience, and Lambert applies it to higher education with the authority of someone who has lived in volatile, uncertain, and complex environments since childhood. This is not a framework he borrowed from a management book. It is how he perceives the world.

The Question Worth Sitting With

There is a broader pattern at work here that goes beyond ghost students, although the ghost student crisis is likely its most visible current sign. Higher education has spent recent years quickly adopting new platforms, modalities, AI tools, and enrollment strategies. Much of this adoption has been necessary and beneficial. However, the sector has not applied the same discipline Lambert repeatedly emphasizes, anticipating what comes after the solution.

What are the second and third-order effects of moving an entire enrollment system online without rethinking the identity verification infrastructure? What happens to institutional culture when the staff closest to students are reassigned to fraud detection? What does it mean for public trust in community colleges when a third of applicants in the nation’s largest system turn out to be fabricated?

Leaders cannot answer these questions by simply using another tool. They need a different kind of institutional thinking. One that begins not with “how do we fix this?” but with “what did we set in motion, and what is it producing that we have not yet identified?”

Lambert’s instinct, shaped by decades of navigating complexity across continents, cultures, and institutional contexts, is that the answer begins with leaders willing to do the inner work to quiet the ego, lay down the armor, and openly acknowledge that a problem exists before a solution is within reach. Most leadership pipelines do not develop leaders this way, and curricula rarely recognize it. As AI continues to accelerate environmental complexity, that gap will become the most critical.

The technology will keep evolving, and so will fraud schemes. However, whether institutional leaders can think in second- and third-order terms, see the cascade before it occurs, and plan for long-term effects rather than just immediate results will determine which institutions succeed and which spend the next decade reacting to problems they helped cause.

In other words, fixing the first issue isn’t enough.

The real question is whether anyone is paying attention to the next three.

The opinions expressed are solely those of the author and not a direct representation of N2N Services, Inc. or LightLeapAI.