So my friend recently bought a used track bike for a really good price and he asked if I can take a look at it. Long story short the frame is great to my knowledge but i noticed that the headset spins really loosely.I was looking and when I removed that top cap over the stem and the stem itself the fork comes out. It also jiggled when i shook it. Any help would be greatly appreciated.

Not sure what your concerns are. Is it play in the headset when it's properly adjusted? If you need to know how to adjust a threadless headset try this https://www.parktool.com/repair/readhowto.asp?id=65

Here you go:

https://bicycletutor.com/adjust-threadless-headset/

https://www.parktool.com/repair/readhowto.asp?id=65

On the Park Tool - scroll down the article to:

Headset Adjustment - Threadless Type

Thanks for the input ill try to adjust it when i have a chance.

bikinfool - yes i believe there was play in the headset because I picked up the bike and I felt it shaking in the front end.

The key is if it's adjusted correctly. Was it up and down movement or side to side? Analysis can help...

Just following the directions of attaching the stem and top-cap should fix it. Follow direction to the letter.

Apply torque to the stem-bolts as suggested by the stem's manufacturer. Or BIG trouble can result.