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Billions Saved: Feds Halt Student Aid Fraud Ring
11 Dec
Summary
- Department of Education stopped over $1 billion in student aid fraud.
- New controls target 'ghost students' and fake identities.
- Verification now requires ID for first-time federal aid applicants.
The Department of Education announced it prevented more than $1 billion in student aid fraud during President Trump's initial year in office. This achievement stems from new "enhanced fraud controls" implemented in June to counter sophisticated schemes, including "ghost students" and the misuse of deceased individuals' identities, often powered by AI bots or criminal networks.
The department heightened its identity verification process for first-time Federal Student Aid applicants. This requires individuals to present valid government-issued photo identification, either in person or via live video conference. This measure has been crucial in stopping coordinated international fraud rings and AI bots from illicitly obtaining taxpayer-funded loans.
These efforts have already flagged nearly 150,000 suspect identities and alerted educational institutions. The Department of Education also published online resources warning families about fake college websites and is establishing a new fraud detection team within its Federal Student Aid office to combat ongoing threats.
