Enhanced controls prevented more than $1 billion in attempted financial aid fraud in the past year, according to the Department of Education.
In a December 11 press release, the Department announced by implanting fraud controls they prevented the fraud which included coordinated international fraud rings and AI bots pretending to be students.
The fraud controls implemented earlier this year govern how institutions of higher education distribute financial assistance, including mandatory identity verification for certain first-time applicants.
In June, a nationwide identity verification effort to eliminate fraud and abuse was launched and, the Department said within the first week, it identified approximately 150,000 suspect identities in current FAFSA forms. Postsecondary institutions were immediately notified of the fraudulent activity.
The Department has also launched a new page on StudentAid.gov/scams designed to provide information to students and families on “fake schools” and how to spot scams, including a list of fake schools which was developed from sources outside of the Department of Education. While some of the institutions included on the list have names similar to actual or reputable schools, the Department encourages students and families to reduce their risk of being scammed by carefully checking school names, website URLs, and other available information.
A new fraud detection team within Federal Student Aid is also being created which will be responsible for combatting fraud and abuse.
