The "No Aid for Ghost Students Act of 2026" requires the use of an identity fraud detection system for higher education aid applications, aiming to prevent identity fraud. The system will be used to review applications to determine if there's a reasonable suspicion of identity fraud. If such suspicion exists, the Secretary is mandated to carry out notifications accordingly. This bill will impact the verification processes carried out under the Higher Education Act of 1965, potentially affecting the receipt of aid by preventing fraudulent applications from receiving aid.
No Aid for Ghost Students Act of 2026
This bill requires the Department of Education (ED) to establish an identity fraud detection system for the Free Application for Federal Student Aid (FAFSA).
Beginning on October 1, 2026, ED must use an identity fraud detection system to review each submitted application to determine whether the applicant presents a reasonable suspicion of identity fraud. If ED makes such a determination, it must notify the applicant and each institution of higher education (IHE) designated on the application that the applicant is subject to additional identity verification.
An IHE may not disburse federal financial aid to an applicant that presents a reasonable suspicion of fraud unless the IHE verifies the applicant's identity in person or by live video. If the applicant's identity is confirmed, the IHE must notify ED that the applicant's identity has been verified.
ED must establish guidelines for the identity verification procedures conducted by IHEs.
(On April 26, 2026, ED began implementing a real-time identity fraud detection process within the FAFSA form that places applicants into one of four risk categories. High-risk applicants must confirm their identity by presenting documentation during the online application process, including via a live camera process. Applicants who are rejected via this automated process must then have their identity verified in person by IHEs.)