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A Republican-led bill aimed at preventing scammers from submitting fraudulent federal student aid applications to collect the money and run is moving forward in the House.
The “No Aid for Ghost Students Act of 2026” seeks to amend the Higher Education Act to require the use of fraud detection systems in FAFSA applications to spot and block the approval of fraudulent applications.
Fraud and scams in student loan programs have cost taxpayers at least $90 million, “including more than $30 million disbursed to deceased individuals and more than $40 million disbursed to companies using bots disguised as fake students,” according to the U.S. Department of Education.
Congressman Burgess Owens of Utah introduced the “ghost students” legislation, which passed the House Committee on Education and Workforce on March 17 in a 30-3 vote, gaining co-sponsorship from multiple representatives.
The bill proposes establishing guidelines for in-person and live identity verification procedures, requiring regular reports to Congress, and yearly audits of the system.
The bill’s goal is to codify into law a fraud detection initiative that Trump’s Education Department rolled out late last year to crack down on the problem, according to the National Association of Student Financial Aid Administrators.
The “Ghost Students” bill was one of three advanced by the House education committee in mid-March aimed at stopping fraud, the others being the Student Aid Fraud Oversight and Accountability Act and the FAFSA Verification Efficiency Act, the group reported.
The student aid fraud act would 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,'” the group reported.
The FAFSA Verification Efficiency Act would verify the social security number and citizenship status of anyone applying for federal student aid, prompting some concerns from Democrats, the association reported.
A representative of the Department of Education Office of Inspector general told The College Fix “ghost students, straw students, admissions fraud, enrollment fraud, fraud rings – it’s all student aid fraud, and fighting student aid fraud has long been a top priority for our office.”
In a January interview with ABC News, Jason Williams, assistant inspector general for investigations at the U.S. Department of Education’s Office of Inspector General, said “it’s a huge issue.
“They’re stealing identities,” he said. “These loans are not being repaid.”
Williams noted that while “ghost students” have been operating for some time, the issue grew larger during the COVID-19 pandemic, when schools went online.
He told ABC that over the past five years, the federal government has investigated more than $350 million in fraud and has over 200 investigations open, “and that’s only in the universe of what we know.”
Rep. Owens celebrated his bill’s passage on X, posting: “Federal aid needs to go to those 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. I am grateful my bill passed with bipartisan support and look forward to it passing the full House, Senate, and becoming law.”
His office did not respond to a request for comment.
Preston Cooper, an economist for the center-right American Enterprise Institute, said something needs to be done to stop the fraud.
“Financial aid fraud is rampant, especially in an age when fraudsters can use AI tools to apply for financial aid and sometimes even ‘enroll’ in online classes,” he told The College Fix.
“This is the very least that federal authorities can do to ensure that the financial aid taxpayers are providing actually goes to real students.”
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