Department of Education stopped $1 billion in student aid fraud, promises more crackdowns in 2025
Education Secretary Linda McMahon wished taxpayers a 'Merry Christmas' in the announcement, pointing to the Trump administration's work to root out fraud and waste.
The U.S. Department of Education announced it has stopped over $1 billion in attempted student aid fraud in 2025, crediting strengthened identity verification policies reinstated under the Trump administration.
The reforms, which include mandatory ID checks for select first-time FAFSA applicants, were introduced after a wave of fraud schemes exploited loosened rules under the Biden administration.
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Federal investigators found nearly $90 million in aid had already been fraudulently disbursed, including over $30 million to deceased individuals and more than $40 million to bots posing as students.
The Department responded with a nationwide identity check in June, immediately flagging nearly 150,000 suspicious FAFSA submissions and notifying colleges of potential fraud.
Education Secretary Linda McMahon said requiring an ID to access taxpayer-funded aid is common sense. “From day one, the Trump administration has been committed to rooting out waste, fraud, and abuse across the federal government,” she said. “Merry Christmas, taxpayers!”
To help students avoid fake schools, the Department also launched a new webpage that warns about AI-generated scam websites impersonating legitimate colleges. These sites use deepfake content, fake degrees, and chatbots to trick students into applying or handing over personal information.
A public list of known scams is now available, with guidance on how to verify real schools.
Looking ahead, the Department is building a dedicated fraud detection team within Federal Student Aid to expand enforcement. Officials expect the new unit will help deliver even more savings and protect future applicants from exploitation.
