Why It Matters

Federal student aid fraud is increasing, according to The U.S. Treasury's Financial Crimes Enforcement Network. The agency flagged elaborate schemes using stolen identities and paid accomplices to drain federal student aid in July.

The Senate Health, Education, Labor, and Pensions Committee will consider the No Aid for Ghost Students Act of 2026 (S.4428) at a business meeting on September 24, alongside nominations for Surgeon General and other health positions. The bill would require the Department of Education to screen every FAFSA submission for identity fraud and block disbursement of aid to applicants who cannot verify their identity, codifying enforcement tools the agency has already begun deploying.

The Hearing

The Senate HELP Committee is chaired by Sen. Bill Cassidy (R-LA) with Sen. Bernie Sanders (I-VT) as ranking member. Sen. Ashley Moody introduced S.4428 as the Senate companion to legislation the House passed in June 2026.

Context

The Department of Education reported preventing more than $1 billion in federal student aid fraud since January 2025. The Department of Education identified nearly 150,000 suspect identities in current FAFSA forms within the first week of deploying new screening tools and has reported preventing more than $100 million in additional fraud since launching its real-time fraud detection system in April 2026. A state audit found eight Utah public colleges lost as much as $1 million to fraud schemes in 2025.

FinCEN's July alert described fraud schemes using ghost students, namely stolen or fake identities used to submit FAFSA applications, as well as straw students, meaning real individuals who paid a fee to participate in the fraud, and also corrupt insiders at educational institutions facilitating the schemes.

The Bottom Line

S.4428 would require the Department of Education to screen every FAFSA submission for identity fraud and prohibit disbursement of federal student aid to applicants who cannot verify their identity.

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