WASHINGTON, D.C. – U.S. Representative Glenn “GT” Thompson (PA-15) introduced a bill that would require strong safeguards to prevent student aid fraud.
This issue, commonly referred to as “ghost student” fraud, refers to 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. These schemes have cost taxpayers millions of dollars and can prevent actual students from getting into classes.
The Student Aid Fraud Oversight and Accountability Act will create an oversight mechanism requiring the Education Department to identify institutions that disburse federal aid to applicants flagged for potential fraud, placing those institutions in a priority category that can allow for program reviews, audits, and other oversight activities. The legislation provides an exception for institutions that verify student identity, through in-person or live video call verification, before dispersing student aid.
“Through this bill, we can ensure ghost students are unable to counterfeit identities and put a stop to federal student aid fraud,” Rep. Thompson said. “It’s important we do this to prevent crowding out real, deserving students from college classrooms.”
“Most colleges are doing the right thing, but when schools disburse federal student aid to people flagged for potential identity fraud without verifying who they are, it opens the door for abuse,” said Rep. Walberg (MI-05), Chairman of the Education and Workforce Committee. “Rep. GT Thompson’s bill makes it clear: if you’re handling taxpayer-funded aid, you have a responsibility to make sure it’s going to legitimate students. This legislation is part of the Committee’s broader effort to crack down on fraud across federal programs—including ‘ghost student’ scams that leave taxpayers on the hook for millions and crowd real students out of classrooms.”
In 2025, the Department of Education discovered that almost $90 million in federal student aid was distributed to fraudulent actors. This included millions of dollars disbursed to deceased individuals and more than $40 million collected by entities using bots disguised as students. This crisis has hit states like California and Minnesota particularly hard. Over the past year, scammers stole more than $10 million from California’s community colleges, where roughly 34% of applicants were identified as fake. In Minnesota, more than 1,800 ghost students collected $12.5 million in taxpayer-funded grants and loans.
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