A new consumer alert for parents and students trying to apply for federal student aid. There’s a new crackdown to stop financial aid fraud.
It’s a growing problem, as students apply for federal student aid only to find out someone has already fraudulently applied for assistance under their name.
The U.S. Secretary of Education, Linda McMahon, said, “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.”
Colleges and universities nationwide are dealing with fake applications, losing millions of dollars. Last week, the department said its FSA fraud detection program reported nearly 150,000 federal aid applications were pulled for suspected fraud.
The department said temporary verification changes will apply to first-time applications for the 2025-26 award year current summer term. However, a more permanent verification process will take place during the fall term.
Effective immediately, all first time FAFSA applicants will be required to present an un-expired, valid government-issued photo ID either in-person, or live via video conference to verify their identity.
They also report that the rise in artificial intelligence and the surge in online classes have led to a dramatic rise in fake online enrollment, where scammers are using AI as ‘ghost students’ to join online classrooms, to collect financial aid checks.
Soon, professors find the students aren’t real.
Here’s a few tips to protect your student:
- Consider a security freeze on your child’s credit report. It makes it difficult to open new credit accounts or take out loans in their name. 16 and 17-year old’s can typically do their own credit freeze.
- Parents should monitor their child’s online accounts and social media.
- Change your FSA ID password. If you believe your password information has been compromised change it immediately.
- Protect your mail. Students are encouraged to use their parents’ home address or a P.O. Box for confidential mail if you live off campus.
- Talk to your child about their online habits. Make sure they understand the importance of not oversharing information.
