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Department of Education has blocked more than $1 billion in fraudulent federal student aid applications, identifying nearly $90 million that had already been disbursed to illegitimate recipients.
This intervention targets a scheme involving "ghost students," a term used to describe stolen or fake identities that enroll in colleges to collect aid meant for legitimate borrowers.
Officials faulted previous administration policies for weak identity verification controls, noting that fewer than 1% of students were required to verify their identity during the pandemic era.
In response, the department integrated a new identity verification system into the online FAFSA application, estimating it will save taxpayers more than $1 billion this cycle.
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