Department of Education stopped $1 billion in student aid fraud, promises more crackdowns in 2025

Education Secretary Linda McMahon wished taxpayers a 'Merry Christmas' in the announcement, pointing to the Trump administration's work to root out fraud and waste.

The U.S. Department of Education announced it has stopped over $1 billion in attempted student aid fraud in 2025, crediting strengthened identity verification policies reinstated under the Trump administration. 

The reforms, which include mandatory ID checks for select first-time FAFSA applicants, were introduced after a wave of fraud schemes exploited loosened rules under the Biden administration.

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Federal investigators found nearly $90 million in aid had already been fraudulently disbursed, including over $30 million to deceased individuals and more than $40 million to bots posing as students. 

The Department responded with a nationwide identity check in June, immediately flagging nearly 150,000 suspicious FAFSA submissions and notifying colleges of potential fraud.

Education Secretary Linda McMahon said requiring an ID to access taxpayer-funded aid is common sense. “From day one, the Trump administration has been committed to rooting out waste, fraud, and abuse across the federal government,” she said. “Merry Christmas, taxpayers!”

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To help students avoid fake schools, the Department also launched a new webpage that warns about AI-generated scam websites impersonating legitimate colleges. These sites use deepfake content, fake degrees, and chatbots to trick students into applying or handing over personal information. 

A public list of known scams is now available, with guidance on how to verify real schools.

Looking ahead, the Department is building a dedicated fraud detection team within Federal Student Aid to expand enforcement. Officials expect the new unit will help deliver even more savings and protect future applicants from exploitation.