The House Education and Workforce Committee advanced a bill on Tuesday led by U.S. Rep. Glenn “GT” Thompson (R-PA) that would require strong federal safeguards to prevent student financial aid fraud.
Commonly referred to as “ghost student” fraud, these are schemes in which bad actors use stolen or counterfeit identities to submit college admission and federal student aid applications, enroll in courses, extract federal student aid, and then vanish with the extra funds. Rep. Thompson said such schemes have cost taxpayers millions of dollars and prevented actual students from getting into classes.
The Student Aid Fraud Oversight and Accountability Act of 2026, H.R. 7891, would require the U.S. Secretary of Education to prioritize program reviews of institutions of higher education that disburse federal financial aid under federal law without verifying the identity of a student whose Free Application for Federal Student Aid (FAFSA) presents a reasonable suspicion of identity fraud.
This oversight mechanism would require the U.S. Education Department to identify institutions that disburse federal aid to applicants flagged for potential fraud, placing them in a priority category that would allow for program reviews, audits, and other oversight activities.
“The advancement of the Student Aid Fraud and Accountability Act is a clear indication that we must put a stop to fraudulent actors plaguing our education system and taking taxpayer funds,” Rep. Thompson said. “I look forward to working with my colleagues to pass this commonsense legislation on the House Floor.”
H.R. 7891 also would provide an exception for institutions that verify student identity, through in-person or live video call verification, before dispersing student aid, according to a bill summary.
In 2025, the Education Department reportedly discovered that almost $90 million in federal student aid was distributed to fraudulent actors, including millions of dollars disbursed to deceased individuals and more than $40 million collected by entities using bots disguised as students, the summary says.