The Trump administration has prevented more than $1 billion in federal student-aid fraud this year by implementing stricter identity verification for first-time applicants, according to the U.S. Department of Education.
Officials say the effort has stopped coordinated domestic and international fraud schemes, including applications submitted on behalf of deceased individuals and artificial online personas.
Education Secretary Linda McMahon announced Thursday that the department introduced mandatory identification checks after uncovering roughly $90 million in fraudulent aid earlier this year.
Of that total, $30 million was issued to dead individuals, and $40 million went to companies using automated bots posing as students.
“It was really a pretty simple thing to do,” McMahon told Fox Business. “You think about the fact that when you buy airplane tickets, you have to show an ID—if you’re going to rent a car.”
“But there had been no kind of ID verification as students filed their application for a student loan.”
She stressed that fraudsters were exploiting gaps in the Free Application for Federal Student Aid (FAFSA) system to steal taxpayer dollars.
Under the Biden administration, identity verification applied to fewer than 1 percent of applicants, officials said, creating what the department described as “a prime opportunity for fraudsters to exploit the FAFSA process and steal taxpayer funds.”
McMahon noted that colleges and universities nationwide had been overwhelmed by highly sophisticated fraud rings and requested federal assistance.
In response, the department launched a nationwide identity verification initiative in June, requiring first-time FAFSA applicants to present valid government-issued photo identification either in person or via live video conference.
According to the Washington Times, institutions must retain documentation of the verification. Within the first week, nearly 150,000 suspect applications were flagged, and schools were notified immediately.
The department also launched a dedicated “Avoid Student Aid Scams” section on the Federal Student Aid website, providing guidance on identifying fake schools and fraudulent websites.
The list includes institutions such as Baltimore Metropolitan University, Long Beach University California, Martin Luther King University and Westmoreland University of Virginia.
Authorities caution that some of these entities use AI-generated content, including videos and chatbots, to mislead prospective students.
Officials said a new fraud-detection team within the Federal Student Aid office is being assembled to further target and dismantle fraudulent operations.
McMahon emphasized that these measures will ensure taxpayer funds are directed to legitimate students pursuing higher education.
“From day one, the Trump Administration has been committed to rooting out waste, fraud, and abuse across the federal government,” she said. “As a result, $1 billion in taxpayer funds will now support students pursuing the American dream, rather than falling into the hands of criminals. Merry Christmas, taxpayers!”
Experts say the administration’s approach addresses systemic vulnerabilities in federal student-aid programs.
By requiring ID verification and monitoring suspicious applications, the department is limiting opportunities for international rings and automated scams to exploit gaps in the FAFSA system.
The new measures also aim to restore public confidence in the distribution of federal education funding.
While the crackdown has drawn attention for its scale, officials emphasize that all applicants are presumed innocent until verified.
The Education Department continues to refine its fraud-prevention protocols and is encouraging schools, students, and families to remain vigilant.
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