ED Publishes FAQ Addressing Real-Time FAFSA Fraud Detection Process
By Sarah Austin, NASFAA Policy Analyst
The Department of Education (ED) published an electronic announcement on Friday that provides a list of frequently asked questions related to the real-time FAFSA fraud detection process.
The FAQ covers five topic areas:
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Identity Confirmation Methods and Standards
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Fraud Comment Codes, Rejects, and V4/5
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FAA Fraud Override and Inter‑School Coordination
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Special Populations and Scenarios
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Compliance, OIG Reporting, and Prior‑Year Aid
While many of the questions have been answered in other forums, such as ED’s earlier announcement detailing the fraud detection process and their May 1, 2026 webinar, the FAQ provides new information for several previously unanswered questions. Financial aid administrators should read the full FAQ, as it contains important details beyond what is covered here.
In the FAQ, ED reiterates that no action is required when an ISIR is flagged with comment code 360 (risk evaluation could not be performed), and adds that those records will not be reevaluated automatically. Instead, if a correction is made to the FAFSA, the record will be reevaluated at that time.
ED also provided information about the fraud detection process for incarcerated applicants, explaining that they are not exempt from the real-time fraud evaluation or identity confirmation process. If they are unable to confirm their identity in real-time on a mobile device with an acceptable form of identification, their ISIR will be rejected and they must confirm their identity with the institution. The department reminded institutions of the documentation flexibilities available to incarcerated individuals when confirming their identity, as outlined in Electronic Announcement APP-25-16.
Another key question addressed whether schools are required to return previously disbursed Title IV aid if the student's application is later determined to be fraudulent. ED confirms schools must return all Title IV aid in cases where a student is determined to have been ineligible for Title IV aid, even if the school did not have knowledge of the ineligibility at the time of disbursement. The FAQ says “This applies even in cases involving fraud, where the school did not have verification flags or other indicators at the time of disbursement. The absence of prior knowledge or verification selection does not relieve the school of responsibility if the student was not, in fact, eligible under the statute or regulations. The financial responsibility for improper payments lies with the school.”
Stay tuned to NASFAA’s Today’s News for updates as additional guidance becomes available.
Publication Date: 7/21/2026
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