The Trump administration says a new requirement forcing high-risk student aid applicants to prove their identity with government-issued identification has already stopped nearly $200 million in attempted fraud in less than two months.
The Department of Education rolled out its new real-time identity verification system on April 27, embedding fraud detection directly into the Free Application for Federal Student Aid (FAFSA) process. Applicants flagged as high-risk must now verify their identity before gaining access to federal grants and loans.
“Since we launched it, we’ve prevented nearly $200 million from falling into the hands of fraudsters,” James Bergeron, Deputy Under Secretary of Education and Acting Federal Student Aid Chief Operating Officer, told Fox News Digital.
The new system represents the latest escalation in the administration’s crackdown on so-called “ghost students” — fraudulent applicants, often aided by artificial intelligence and stolen identities, who enroll solely to collect taxpayer-funded financial aid.
According to the Department of Education, the fraud-screening technology evaluates every FAFSA submission in real time using risk-based identity checks. Applicants deemed suspicious must provide a valid government-issued photo ID before receiving aid.
The department estimates the new safeguards could save taxpayers more than $1 billion during the current FAFSA cycle.
“Effective immediately, fraud detection is built directly into the FAFSA itself, with every applicant evaluated in real-time using risk-based identity screening,” the department said when announcing the initiative.
Education Secretary Linda McMahon has made fraud prevention a central priority since taking office, arguing that pandemic-era policies weakened oversight and opened the door to widespread abuse.
“Since day one, the Trump Administration has protected the integrity of federal student aid programs,” McMahon said in an April statement. “We’ve rooted out fraud, waste, and abuse—keeping $1 billion out of fraudsters’ hands and putting it back in the pockets of real students and families.”
The administration argues that previous verification requirements were dramatically scaled back during the COVID era. Education officials say fewer than 1% of FAFSA applicants were required to verify their identity after submitting applications, creating opportunities for increasingly sophisticated fraud rings.
The problem became especially acute in community colleges, where criminals exploited online enrollment systems to create fake student accounts and collect federal aid.
California has emerged as the epicenter of the fraud epidemic. Department officials say the state accounted for roughly $171 million of the fraud blocked under the new system. The California Community Colleges system has reported that nearly one-third of applications during the 2024-25 academic year were fraudulent, with millions in federal and state aid flowing to ghost students.
Federal officials have also expanded data-sharing agreements with the Social Security Administration to catch identity theft and prevent aid from being distributed to deceased individuals. The department says those efforts alone have already saved taxpayers more than $30 million.
“American citizens have to present an ID to drive a car, to get on a plane,” Bergeron told Fox News Digital. “So we only think that it’s right that folks should have to verify their identity to access the tens of thousands of taxpayer dollars that go to fund post-secondary education.”
The Education Department has also partnered with the Department of Homeland Security as part of a broader effort to ensure federal student aid does not flow to individuals who are not legally eligible for the programs.
Not everyone is convinced the tougher rules will come without costs. Higher education groups and financial aid administrators have warned that additional identity checks could create hurdles for legitimate students, particularly those who lack easy access to government-issued identification or reliable technology.
Still, colleges across the country have reported growing problems with AI-powered fraud schemes, stolen identities, and automated bot attacks targeting federal aid programs. Federal officials argue the new system shifts fraud prevention to the front end of the process, stopping suspicious applications before taxpayer dollars leave the Treasury.
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