Education Department Deploys Real-Time Fraud Screening Tool on FAFSA Applications, Flagging $60 Million

The Trump administration has intercepted roughly $60 million in fraudulent student loan applications since deploying a new risk assessment tool last month. The Department of Education launched the tool on April 26 to screen federal student aid applicants for fraud.

Since then, administration officials said approximately 300,000 fraudulent applications totaling $60 million in student loans have been flagged.

Fraud detection is built directly into the Free Application for Federal Student Aid, with every FAFSA applicant evaluated in real time using risk-based identity screening. Applicants who display a certain level of fraud risk must present government-issued identification before accessing Pell Grants or federal student loans.

The department estimates its efforts will save taxpayers more than $1 billion during this year’s FAFSA cycle.

Financial aid administrators have been able to assist applicants in resolving flagged applications through in-person verification since May 3. ” The Department of Education described the initiative as the largest and most comprehensive nationwide fraud prevention effort in the agency’s history.

Vance. The Justice Department has stood up a dedicated National Fraud Enforcement Division. McDonald was sworn in as the first assistant attorney general of the National Fraud Enforcement Division on April 1.

The administration’s identity-fraud prevention effort has produced more than $1 billion in savings since taking office. Officials found nearly $90 million in federal student aid that had been improperly disbursed earlier this year. More than $30 million in federal student aid was sent to deceased individuals and more than $40 million in federal student aid was sent to companies using bots to pose as fake students.