The Department of Education is reminding financial aid administrators about the importance of completing the identity verification process for flagged individuals and reporting suspected fraud.
Identity Verification update
The Department announced on February 24 that they have resumed flagging applicants that meet criteria for potentially fraudulent activity. This includes applicants suspected of using another person’s identity when submitting a 2024-25 and 2025-26 FAFSA.
Schools will then receive a new ISIR flagged for V4 or V5 verification and will be required to complete the verification process. Verification must be completed before disbursing Title IV funds, including subsequent disbursements for students selected for verification after a disbursement has been made.
According to the Department, if a student doesn’t complete the verification process, the school isn’t liable for any aid disbursed prior to receiving an ISIR flagged for V4 or V5 verification. However, the student is liable for the full amount as there is no evidence they were eligible for the aid, the Department said
Starting in the spring 2025, the Department will start generating ISIRs that are flagged for other issues that may require verification or to resolve comment codes for applicants assuming the identity of a deceased person, as well as those who are permanently or temporarily precluded from receiving aid as a result of drug-related offenses.
The functionality for reporting V4/V5 verification results either manually or by batch files has been delayed until the release of the 2026-27 application.
The Department has advised schools that suspected cases of identity theft should be reported to the Office of the Inspector General (OIG).
Reporting fraud reminders
The Department said if a school or other partner suspects that a student, employee, or other individual has misreported information or altered documentation in order to fraudulently obtain federal funds, these cases must be reported to the OIG. According to the Department, this can include such things as false claims of independent student status, false claims of citizenship, use of false identities, forgery of signatures or certifications, and false statements of income.
Also, the Department said a school must refer to the OIG any third-party servicer who may have engaged in fraud, breach of fiduciary responsibility, or other illegal conduct involving Title IV programs.
Complaints about fraud rings must also be reported to the OIG through their encrypted portal at OIGhotlineportal.ed.gov.
In the announcement, the Department said financial aid administrators may want to consult with their school’s legal counsel before referring suspected cases of fraud or misconduct. The regional School Participation Division can also be contacted for guidance.
The contact information for the OIG includes: OIG Headquarters, U.S. Department of Education, 400 Maryland Avenue SW, Washington, DC 20202-1500, oig.ed.gov/contact-us, oig.ed.gov/oig-hotline, or by phone at 1-800-MIS-USED (1-800-647-8733).
