The United States government has announced that it has intensified its efforts to curb fraud in the education sector, blocking about $1bn from alleged ghost students since the commencement of the administration of President Donald Trump in January 2025.
The U.S. Department of Education (DoE) has announced this development in a statement sent to the press on Thursday, December 11, 2025.
The Department of Education said the $1bn was blocked from alleged ghost students through a new “enhanced fraud controls” the department implemented in June.
The Department further explained that the term “ghost students” refers to fraudulent applicants who enroll in post-secondary institutions, primarily online programs at community colleges with lower barriers to entry, with the sole intent of stealing financial aid money.
These “ghost students” often use stolen or synthetic identities to complete the Free Application for Federal Student Aid (FAFSA) and enroll in classes.
To crack down on fraud, the Department of Education heightened its identification verification process for first-time applicants attempting to receive Federal Student Aid.
“American citizens have to present an ID to purchase a ticket to travel or to rent a car — it’s only right that they should present an ID to access tens of thousands of taxpayer dollars to fund their education,” U.S. Secretary of Education Linda McMahon told the press on Thursday.
“From day one, the Trump Administration has been committed to rooting out waste, fraud, and abuse across the federal government,” she added. “As a result, $1 billion in taxpayer funds will now support students pursuing the American dream, rather than falling into the hands of criminals. Merry Christmas, taxpayers!”
Within the first week of the new verification process in June, officials say they flagged almost 150,000 suspect identities in current Free Application for Federal Student Aid (FAFSA) filings and “immediately alerted” colleges and universities to the suspicious activity.
“Colleges and universities across the country reported being under siege by highly sophisticated fraud rings and requested the Trump Administration for help,” the Department of Education said in a press release on Thursday.
The new verification process requires first-time applicants to “present, either in person or on a live video conference, an unexpired, valid, government-issued photo identification to an institutionally authorized individual, and the institution must preserve a copy of this documentation.”
The verification measure has thwarted more than $1bn from alleged ghost students, which the Department of Education said includes “coordinated international fraud rings and AI bots pretending to be students.”
Pan-Atlantic Kompass reports that the latest increased verification process follows an announcement by the Trump administration that it has uncovered nearly $90 million that was disbursed to suspected scammers in 2024, including $30 million in loans to dead people and more than $40 million disbursed to companies using bots disguised as fake students.
Also, recent data published by the California Community College System revealed that 34% of community college applications in 2024 resulted in millions of dollars in federal and state aid being misdirected.
It was also gathered that the Foothill–De Anza Community College District received roughly 26,000 applications, according to media reports in 2024, with 10,000 placed on hold for possible fraud before the beginning of the term. In Nevada, the College of Southern Nevada wrote off $7.4 million in the fall 2024 semester due to a “ghost student” scheme, according to reports.
