Today, the U.S. Department of Education announced it will launch a nationwide effort to eliminate identity theft and fraud in the federal student aid programs for the fall 2025 semester to protect taxpayers while significantly reducing the administrative burden on colleges and universities. In the interim, the Department will require institutions of higher education to validate the identity of certain first-time applicants who are enrolled in the summer term. Federal Student Aid (FSA) data indicates that the rate of fraud through stolen identities, particularly involving technologically advanced fraud rings, has reached a level that imperils the federal student assistance programs under Title IV of the Higher Education Act.
The COVID-19 pandemic led many institutions to move classes online. At the same time, the Biden Administration removed verification safeguards and diverted resources from fraud prevention toward its illegal loan forgiveness efforts.
“When rampant fraud is taking aid away from eligible students, disrupting the operations of colleges, and ripping off taxpayers, we have a responsibility to act,” said U.S. Secretary of Education Linda McMahon. “Today’s actions will implement temporary changes to the current verification process to prevent identity theft fraud. We will continue to build longer-term solutions that reduce the administrative burden on institutions and protect American taxpayers who underwrite federal student aid programs.”
The temporary verification selection changes will apply to first-time applications for the 2025-26 award year for the current summer term. FSA expects the number of students requiring identify validation during the summer to be relatively low. This fall, the Department plans to implement a permanent screening process for each FAFSA® applicant to enhance FSA’s ability to immediately stop identity fraud on behalf of colleges and universities. These steps build upon anti-fraud efforts announced in May.
Additional investment in, and focus on, FSA fraud detection efforts in the past week have identified almost 150,000 suspect identities in current FAFSA forms. These applicants will be marked for required live identity verification by schools before aid can be disbursed.
Changes to Identity Validation Requirements:
As part of the fraud prevention effort, the Department will also make changes to the acceptable documentation for identity validation. Notably, an applicant must present, either in person or on a live video conference, an unexpired, valid, government-issued photo identification to an institutionally authorized individual and the institution must preserve a copy of this documentation.
Guidance on these new required processes is available here.
Background:
Recent data from the California Community College System indicate that a large percentage of community college applications from the last calendar year were fraudulent, resulting in millions lost in federal and state aid. Similarly, in 2024, media reports allege that Foothill-De Anza Community College District received around 26,000 applications, and of those, 10,000 were put on hold for possible fraud before the beginning of the quarter. Two weeks ago, the Board of Governors for the state community college system voted to require ID verification for all applicants across the state.
In Minnesota, reports indicate Riverland Community College averaged more than 100 potentially fraudulent applications per year during the last two financial aid periods. In addition, Century College in Minnesota reports a similar rate of fraud to what is being seen in California.
The College of Southern Nevada wrote off $7.4 million in the Fall 2024 semester because of fraudulent enrollments.
Media reports have outlined how institutions nationwide are increasingly burdened with fake applications which pose a cybersecurity threat and inconvenience financial administrators and recruiters.