A federal crackdown on student loan fraud is producing results
A federal crackdown on student loan fraud is producing results at a pace that has surprised even administration insiders, with officials revealing that a newly deployed screening system has already caught hundreds of thousands of bad actors attempting to steal from American taxpayers.
The Department of Education activated the risk assessment system on April 26, quietly embedding it directly into the Free Application for Federal Student Aid — the gateway through which millions of Americans access Pell Grants and federal loans each year.
In the two weeks that followed, the system flagged roughly 300,000 applications as fraudulent, blocking $60 million in student aid from flowing to individuals officials say had no legitimate claim to it.
A senior administration official confirmed the numbers to the Daily Caller, saying the technology behind the effort represents a significant upgrade in the government’s ability to catch bad actors before any money changes hands.
“We’re using best in class technology, and we’ve been able to stop a lot of those fraudulent activities that are there,” the official said.
The tool works by running every FAFSA submission through a real-time identity screening process the moment an applicant hits submit.
Those who trigger a high-risk designation cannot advance to receive federal funds until they produce government-issued identification — a driver’s license, passport, tribal ID, or permanent resident card.
For the vast majority of legitimate applicants, the process remains invisible. The scrutiny falls squarely on submissions that raise red flags.
Colleges and universities are also being pulled into the effort.
The Department of Education has directed institutions across the country to conduct their own fraud screening
The Department of Education activated the risk assessment system on April 26, quietly embedding it directly into the Free Application for Federal Student Aid — the gateway through which millions of Americans access Pell Grants and federal loans each year.
In the two weeks that followed, the system flagged roughly 300,000 applications as fraudulent, blocking $60 million in student aid from flowing to individuals officials say had no legitimate claim to it.
A senior administration official confirmed the numbers to the Daily Caller, saying the technology behind the effort represents a significant upgrade in the government’s ability to catch bad actors before any money changes hands.
“We’re using best in class technology, and we’ve been able to stop a lot of those fraudulent activities that are there,” the official said.
The tool works by running every FAFSA submission through a real-time identity screening process the moment an applicant hits submit.
Those who trigger a high-risk designation cannot advance to receive federal funds until they produce government-issued identification — a driver’s license, passport, tribal ID, or permanent resident card.
For the vast majority of legitimate applicants, the process remains invisible. The scrutiny falls squarely on submissions that raise red flags.
Colleges and universities are also being pulled into the effort.
The Department of Education has directed institutions across the country to conduct their own fraud screening
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