House Education Committee Advances Student Aid Fraud Prevention Bills
By Maria Carrasco, NASFAA Staff Reporter
The House Education & Workforce Committee on Tuesday advanced three bills focused on preventing fraud in the federal student aid programs. The markup follows an executive order that President Donald Trump signed earlier this week, establishing a task force to “eliminate fraud” in the federal government.
The committee marked up seven bills, three of which focused on preventing fraud in the federal student aid programs – the Student Aid Fraud Oversight and Accountability Act of 2026, the No Aid for Ghost Students Act of 2026, and the FAFSA Verification Efficiency Act. The four other bills focused on K-12 issues and reforming the Truman Scholarship, a merit-based federal grant awarded to college juniors.
Rep. Tim Walberg (R-Mich.), chair of the committee, opened the markup by voicing support for all seven bills and specifically noted that the Student Aid Fraud Oversight and Accountability Act of 2026, the No Aid for Ghost Students Act of 2026, and the FAFSA Verification Efficiency Act would “crack down on federal student aid fraud.”
However, Rep. Bobby Scott (D-Va.), ranking member of the committee, voiced several concerns for all three bills, citing administrative burden on institutions and privacy concerns.
NASFAA has also raised concerns about the FAFSA Verification Efficiency Act, which would allow the Education Secretary to verify the Social Security number and citizenship status of anyone applying for federal student aid, which includes contributors.
NASFAA President and CEO Melanie Storey said that unless a student and their family are seeking to borrow under the Parent PLUS loan program, confirming the parent contributors’ citizenship status is irrelevant and constitutes a privacy breach for the parties involved.
“While we appreciate the desire for operational efficiency, it should not be at the expense of basic privacy rights,” Storey said in a statement. “This bill would simply codify a process for gathering information that is not necessary to verify student eligibility and is outside the boundaries of current computer-matching agreements. FSA should implement user-focused data matches with the Social Security Administration: one to verify the SSN and citizenship status of the applicant/borrowers, and another to verify the SSN of any contributor or others who require an FSA ID.”
More details on each bill considered during the committee markup are provided below:
The Student Aid Fraud Oversight and Accountability Act of 2026
The committee first discussed the Student Aid Fraud Oversight and Accountability Act of 2026, which would amend the Higher Education Act (HEA) to require the Education Secretary to prioritize program reviews of institutions that disburse federal student aid without verifying the identity of a student whose FAFSA “presents a reasonable suspicion of identity fraud.”
Specifically, the bill states that the Education Secretary would identify each institution that has disbursed, on or after October 1, 2026, federal financial aid to a student who presented a reasonable suspicion of identity fraud, as determined by the identity fraud detection system used by the Department of Education (ED). This identity fraud detection system would be established through the No Aid for Ghost Students Act of 2026.
Institutions would be able to determine that a student is not of reasonable suspicion of identity fraud by confirming the student’s identity through in-person verification or live, synchronous audiovisual verification. Conducting such identity verification before disbursement to a student who was flagged by ED as presenting a reasonable suspicion of identity fraud would remove the institution from the program review priority list.
Rep. Glenn Thompson (R-Penn.), who introduced the legislation, said the bill would install “common sense” identity checks to potentially fraudulent students.
“This legislation is a key step in rooting out fraud and abuse in our education system and ensuring our taxpayers' money is not wasted,” Thompson said.
However, Scott noted that this legislation could harm institutions for singular errors, such as neglecting to report that they verified the identity of a student to whom they later disbursed Title IV funds.
“Colleges are working hard to prevent individuals from fraudulently enrolling in their institutions or receiving federal student aid for classes that they did not take,” Scott said. “This bill could penalize institutions for simply making a single mistake with one individual student.”
Scott introduced several amendments to this legislation, including an amendment to prioritize program reviews for institutions that have displayed a pattern of disbursing student aid to potentially fraudulent individuals. This amendment would allow institutions to provide information on any errors or mistakes made regarding a given disbursement to a reasonably suspicious individual. It would also seek to make sure ED targets institutions that are not taking meaningful steps to address fraud issues, rather than institutions trying to do their best to address fraud.
Scott said he would support this legislation, but noted that he expects the committee to work with colleges, financial aid officers, and other stakeholders before the legislation heads to the House for consideration.
Thompson responded to Scott, saying that while he opposes his amendments, he is willing to work with Scott to address his concerns.
Ultimately, the committee voted against including all of Scott’s amendments.
The Student Aid Fraud Oversight and Accountability Act of 2026 advanced in a 33-0 vote.
The No Aid for Ghost Students Act of 2026
The No Aid for Ghost Students Act of 2026, introduced by Rep. Burgess Owens (R-Utah), chair of the House Higher Education and Workforce Development Subcommittee, would amend the HEA to require the Education Secretary to use an identity fraud detection system to review each FAFSA to determine whether the FAFSA presents a reasonable suspicion of identity fraud. It is NASFAA’s understanding that the intent of the bill is to codify the fraud detection initiative that ED is currently developing and plans to implement in the next several months.
This would apply to each FAFSA submitted on or after October 1, 2026. Under this bill, if a student is suspected of identity fraud after submitting their FAFSA, the student would receive a notification from ED that they are subject to additional identity verification requirements. If an institution wants to disburse aid to this student, the institution would need to verify that student’s identity.
Additionally, the bill would require the Education Secretary to establish guidelines for its identity verification procedures for institutions no later than October 1, 2026. The bill then would require ED to annually conduct an evaluation on the identity fraud detection system and report on its effectiveness to Congress.
“Federal aid, it needs to go to students who need it most, and every cent that is defrauded represents a lost opportunity for students in need and a serious offense to the American taxpayer,” Owens said.
Scott also voiced concerns with this legislation, noting that as written, the bill lacks details on what steps an individual should take if they get flagged for verification, especially if that individual is a non-fradulent student but may not have immediate access to necessary documentation. Additionally, Scott warned that this legislation could be confusing to institutions and potentially slow down aid disbursement.
In response, Scott introduced multiple amendments, including language that ED’s fraud detection system would be rooted in the current V4 and V5 verification process. Ultimately, the committee voted against including any of Scott’s proposals.
However, despite these concerns, Scott voiced support for the legislation and the need to address identity fraud in the federal student aid programs.
The No Aid for Ghost Students Act of 2026 advanced in a 30-3 vote.
The FAFSA Verification Efficiency Act
The FAFSA Verification Efficiency Act, introduced by Walberg, would amend the HEA to allow the Education Secretary, in cooperation with the Commissioner of the Social Security Administration (SSA) to verify the social security number and citizenship status of anyone applying for federal student aid, including contributors, through the existing database match.
“As Congress works to reduce improper federal student aid payments, we should make sure the department has the tools it needs to detect fraudulent identities and inaccurate financial information,” Walberg said.
Scott voiced opposition to this bill, citing serious concerns about data privacy for students and their families. He noted that the current statute only requires students and parents applying for a Parent PLUS loan to meet citizenship eligibility criteria, and there is no need for the SSA match to include citizenship status for all contributors.
“This opens the door to very concerning federal data citizenship beyond what is required by law,” Scott said. “Given the Trump administration's ongoing rampant and violent attacks on immigrants and people of color, I'm concerned that this data collection can and will be used to further expand immigration enforcement and intimidate students from mixed status families from applying to college.”
Scott introduced an amendment that would ensure ED safeguards students' and their contributors’ data.
Walberg responded, opposing Scott’s amendment, saying the department already knows how to safeguard students' and families’ data and will use it for the intended purpose of identity verification.
Rep. Suzanne Bonamici (D-Ore.) warned that passage of this bill could discourage students and families from applying to federal student aid, citing constituent fears over immigration enforcement, and voiced support for Scott’s amendment. However, the committee ultimately did not adopt Scott’s amendment after Walberg stated the bill should not be controversial and dismissed concerns over the data collection language as “inaccurate, spin information.”
The FAFSA Verification Efficiency Act advanced in a 19-13 vote, along party lines.
These three bills now move to the House for a vote. The timeline for when the House will consider these bills is unclear. Stay tuned to Today’s News for more updates.
Publication Date: 3/18/2026
David S | 3/18/2026 5:39:09 PM
Nobody isn't opposed to fraud, but you know what already overworked financial aid administrators are not trained to be? Detectives. And let's talk about simple logistics. The Google tells me that the average US college enrolls 6,354 students (and of course some enroll 10 or more times that many); they could be on your (perhaps enormous) campus, or another of your campuses, or at a satellite location, or entirely remote, or any combination thereof, at any time of day, any day of the week. Schools are doing the best they can with the limited resources they have. Congress needs to get real about this.
And anything where this administration makes enhanced use of anyone's citizenship status? The hardest of hard no's, and I'll leave it at that.
Elizabeth B | 3/18/2026 1:9:52 PM
These three bills seem redundant and inefficient. Identity fraud is the root cause of financial aid fraud. Identity fraud needs to be resolved at the federal level and not the institutional level. Requiring the identity and citizenship verification of contributors seems nonsensical as most fraud, from what I have seen, is happening to independent students. That just becomes an added layer of complexity and violation of privacy. Students already cannot receive aid if they don't meet the citizenship requirements.
Armand R | 3/18/2026 12:2:36 PM
It is nice to see new tools added to our toolbox for combating fraud. There are ways to find the fraudulent students and ringleaders, but we're not allowed to use many of them because of various "privacy" concerns and laws. Granted, some such laws are needed, but many of them (such as the terrible FERPA law) only serve to reduce accountability and responsibility and reduce needed transparency.
Ryan W | 3/18/2026 10:40:47 AM
Anyone else tired of schools having the full responsibility to identify and prevent student aid fraud while the US Department of Education, across multiple administrations, makes little to no public effort to assist? Oh, just report it to the OIG's office - they're open for 15 minutes every 3rd Thursday to take your call. Publishing a list of schools where fraudulent disbursements have happened - I'm certain many of us would be there - not for lack of trying - see the thousands of applications many of us screen out annually without any identification from ED. Oh man, I'm gonna fall right off this soapbox in a minute....Keep doing the good work FAAs!
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