Education Department Blocks $200 Million in Student Aid Fraud, Targets $1 Billion This FAFSA Cycle
Updated
Updated · Fox News · Jun 24
Education Department Blocks $200 Million in Student Aid Fraud, Targets $1 Billion This FAFSA Cycle
1 articles · Updated · Fox News · Jun 24
Summary
$200 million in fraudulent federal student aid has been stopped since April 27, when the Education Department began requiring high-risk FAFSA applicants to present government-issued ID.
The new control embeds real-time, risk-based screening directly into the FAFSA form, aiming to stop AI bots and "ghost students" before Pell Grants or federal loans are disbursed.
Officials say the tougher checks reverse pandemic-era verification rollbacks that left fewer than 1% of students verifying identity after filing and helped fuel fraud.
$171 million of the blocked attempts came from California, while expanded data-sharing with the Social Security Administration has separately saved $30 million by catching identity theft and payments tied to deceased individuals.
The department estimates the broader anti-fraud push will save taxpayers more than $1 billion this FAFSA cycle, with added coordination involving Homeland Security and new warnings about AI-driven fake college websites.