April 29, 2026

On March 17, the House Education & Workforce Committee advanced three bills that they are billing as a crackdown on student aid fraud: H.R. 7891, the Student Aid Fraud Oversight and Accountability Act of 2026; H.R. 7892, the No Aid for Ghost Students Act of 2026; and H.R. 7893, the FAFSA Verification Efficiency Act.

Let’s be clear about where things stand. Sophisticated identity-theft rings that have targeted community colleges over the past several aid cycles are a problem, and stopping them is a good thing. Pell Grants exist to help low- and moderate-income students afford college; every dollar diverted to so-called “ghost students” is a dollar that might not reach a real student who needs it, especially with a looming $16.9 billion Pell Grant shortfall.

But the three bills before the House would not meaningfully strengthen protections against fraud. Instead, the three bills would grant the U.S. Department of Education massive new powers to audit schools and withhold financial aid at precisely the moment the Department of Education is telling the country that its existing tools are already working. They also inject new anti-immigrant politics into financial aid. Couple this with the Administration’s continuous weaponization of federal funding and its move to threaten institutions and individuals who support them, and the recipe is for complete control, not oversight, of access and the sector’s operations. 

The legislation risks reversing a decade of hard-won, bipartisan progress to reduce verification burdens on the very students the Pell Grant exists to help.

And the bills do all of that at a moment when students and their families are being squeezed from every direction. The prices of housing, groceries, child care, health care, and student loan payments keep climbing while wages haven’t kept pace. The Hope Center’s own Student Basic Needs Survey finds that roughly three in five college students, and 70 percent of Pell Grant recipients, experience food or housing insecurity while enrolled. Similarly, Trellis Strategies’ Student Financial Wellness Survey tells us that more than half of students would struggle to access even $500 in an emergency. Students can’t afford additional financial aid delays.

A fraud-focused verification package isn’t a response to any of those larger problems. And the bills aren’t just a missed opportunity; they could make the weaponization of student aid dramatically worse.

The progress Congress is about to undo

FAFSA verification has long been one of the most consequential barriers to college access for students from low-income backgrounds. In some cycles, the overall verification selection rate reached as high as 38 percent, and Pell-eligible applicants were historically selected at rates two to three times higher than their non-Pell peers. It was a huge waste of time and resources. Just a few years ago, more than 70 percent of students who completed the process saw no change in their Pell Grant at all. Simply being selected for verification, however, did produce a result: it decreased a students’ likelihood of enrolling in college by 3.8 percentage points, with the largest impact on underrepresented students.

The institutional side is just as lopsided. Brookings researchers estimate that community colleges, which enroll the largest share of Pell recipients, spend roughly one quarter of their entire financial aid office operating budgets on verification, compared with about one percent at private universities. That’s the equivalent of multiple full-time staff members pulled away from financial aid counseling, emergency aid administration, and the kind of basic-needs outreach that actually keeps students enrolled.

Thanks to the bipartisan FUTURE Act and FAFSA Simplification Act, and the direct IRS data exchange that those bills authorized, the Department now receives the vast majority of applicants’ income data directly from the IRS, which has significantly reduced the number of applicants who had to submit verification documents (especially financial aid applicants who make so little they aren’t required to file taxes). The reduction in verification rates over the last five years was a direct result of the new data-matching capabilities that Congress authorized. Any legislation touching verification should be evaluated on whether it preserves that progress.

The Department says its existing tools are already working. So why the new authority?

Here’s what makes the timing of this package particularly strange.

Nearly a year ago, on June 6, 2025, the Department announced a “nationwide effort to eliminate identity theft and fraud in the federal student aid programs.” In December, they hailed the success of that new initiative in stopping more than $1 billion in attempted financial aid theft by “coordinated international fraud rings and AI bots pretending to be students.” These press releases blamed the former Biden Administration for allowing fraud to continue but omitted mention of the bipartisan legislation that spurred the reduction in verification.

On April 15, the Department’s Office of Federal Student Aid issued an Electronic Announcement detailing a new real-time identity-fraud detection capability in the FAFSA. Under this framework, which was officially launched yesterday, applicants are automatically sorted into four risk tiers. “High-risk” applicants must then complete automated identity confirmation in real time. Institutions, the Department is clear, “are not required to take action” on the significant majority of rejected applications. 

The new technology is billed as a way to reduce the more intensive identity verification workload typically borne by schools themselves by stopping would-be fraudsters before they can enroll. In theory, this might relieve some of the verification burden on college and university financial aid officers who have been exceedingly stretched thin in recent years. It also shifts significant powers of financial aid gatekeeping further toward the Department with little corresponding transparency.

Department leadership has spent the past several months aggressively marketing the success of its new anti-fraud initiatives, announcing that its nationwide identity verification technology had prevented $171 million in fraud in California and $93 million in Virginia alone. The Department has also reported that, in a pilot of its predecessor screening tool, only 0.4 percent of students flagged turned out to be actually legitimate students, meaning the Department already has the ability to identify suspected fraud with a high degree of precision.

If the Department says it has already prevented more than $1 billion in fraud, has launched a new real-time detection system that is actively helping schools, and is screening previously submitted applications retroactively, what statutory authority does it actually need that it does not already have?

The Committee hasn’t made that case. At a minimum, Congress should let the new real-time system run long enough to be independently evaluated (by GAO, in particular) before codifying parallel mandates that institutions must operationalize at students’ expense. Below, we detail the risks of each bill.

What each bill actually does — and why it matters

H.R. 7891 - Student Aid Fraud Oversight and Accountability Act of 2026 would require the Department to prioritize program reviews and audits of institutions that, beginning October 1, 2026, disburse aid without verifying the identity of a student whose FAFSA presents a “reasonable suspicion of identity fraud” (more on that later).

Because the underlying fraud detection system is already offered by the Department, the bill’s real effect is to pressure institutions to stack additional identity checks on top of the Department’s own real-time screening, or face a heightened risk of investigation.

And the bill’s safe harbor is very narrow. An institution can only remove itself from prioritized-review exposure by verifying each and every student flagged by the Department through in-person verification or live, synchronous audiovisual means. That standard is poorly matched to fully online and hybrid programs, for adult and non-traditional learners who may not have traditional forms of ID readily at hand, and for working students who are juggling long hours while taking care of their families. (It also may be both overkill and insufficiently future-proofed, as fraudsters have been known to show up for virtual meetings, too). Since the potential scope of flagged applications could easily grow beyond what’s in place with the real-time system today, the bills could end up authorizing (and even encouraging) near universal photo-ID requirements.

Meeting with, and requiring an ID, from each flagged applicant is also a high bar for institutions that serve geographically dispersed student populations. Large online colleges like Southern New Hampshire University or Western Governors University could be especially hard-hit. And so would the nation’s largest community colleges, which have thousands of commuters and working students.

The bill is also badly calibrated on its trigger. A single disbursement error by an institution, potentially out of thousands of transactions processed each cycle, could land that institution on a prioritized program review or audit list. Program-review prioritization should be reserved for institutions that show a genuine pattern of disbursing aid to fraudulent applicants, not a one-off mistake. Members offered amendments to fix this issue, but the Committee rejected them.

But perhaps most alarmingly, HR 7891 amends a longstanding section of the Higher Education Act to dramatically expand the scope of existing anti-fraud measures beyond program reviews to include “audits, investigations, and other oversight activities.”

This is a huge red flag.

While the portion of the HEA governing program reviews has some baseline protections, like allowing colleges to inspect the review guidelines and procedures, getting adequate opportunity to review and respond to a report, and having penalties be proportionate to the mistake—no such protection is afforded to the new powers of audits, investigations, and undefined “oversight activities.” Those powers would remain completely limitless for the Secretary of Education. Given the Administration’s recent attacks on higher education, this is alarming.

One would have to assume the Committee’s drafting of the new anti-fraud language deliberately bypassed the typical safeguards afforded to colleges, because it was inserted to avoid the protections contained in existing law (Section 498A(b)). These authorities would go far, far beyond any power granted to a previous Secretary of Education to withhold financial aid to specific institutions—and on an undefined standard of “reasonable suspicion” that would be entirely determined by the Secretary of Education herself.

H.R. 7891 ultimately advanced on a 33–0 vote. The Ranking Member of the Committee, Rep. Bobby Scott, stated during the markup that his support was contingent on making changes to the bills before the bills move to the floor. And significant changes must be made.

H.R. 7892 - No Aid for Ghost Students Act of 2026 would codify in statute the fraud-detection initiative the Department is already implementing, applying to each FAFSA submitted on or after October 1, 2026. As NASFAA noted, the bill’s apparent intent is to lock into law what the Department has already launched this month: its real-time identity fraud detection tools.

However, the bill contains no guardrails to ensure that legitimate students, particularly first-generation applicants, students without traditional forms of identification, students with limited access to smartphones or reliable internet, and students experiencing homelessness or without a fixed residential address, are not disproportionately screened out or delayed. Without those guardrails, the same disparate impacts that have plagued earlier verification procedures could reappear under a different label. Nothing in the bill limits the scope of future fraud detection to what is already in place today, meaning it could expand dramatically to withhold aid from more students.

And the bill’s operative trigger, the same as in HR 7891 — “reasonable suspicion of identity fraud” — is a broad legalistic term with little history in federal financial aid policy. This term has typically been used only when referring potential matters to the Department’s Inspector General, where facts and evidence could be carefully gathered by career employees with experience in fraud investigations. This bill radically expands the agency’s powers to  make the Secretary the judge, jury, and executioner.

If the loaded term “reasonable suspicion” could be used to potentially withhold aid and initiate far-reaching investigations of schools, that standard should require articulable, credible grounds to believe fraud has occurred, not an unexamined “hunch.” It is also critical that such powers cannot be weaponized against perceived political enemies—perhaps a state or college that isn’t politically aligned with the Administration.

These potential new powers are being offered as the Administration has increasingly engaged in the weaponization of student aid, most recently with accreditation.

Despite the clear potential for creating abuses of power, the bill advanced anyway, 30–3. Committee Democrats again voiced plans to seek changes to the bill before any further action, such as a floor vote.

If the bill moves forward at all, it must require that the Department's risk indicators are established well before any single college or group of students is selected to have their aid withheld, ensure public inspection (or at very minimum, reporting to Congress) of the risk factors or indicators, and mandate the Department publicly report aggregate demographic data on who is being flagged so that differential impact problems can be caught and corrected.

H.R. 7893 - FAFSA Verification Efficiency Act also raises serious concerns. It would authorize the Department, in coordination with the Social Security Administration, to verify Social Security  numbers and citizenship status for every FAFSA “contributor,” which includes parents, stepparents, and spouses who are not themselves applying for federal aid.

Current law appropriately limits citizenship eligibility determinations to the student applicant and, in the case of a Parent PLUS loan, the parent borrower. H.R. 7893 sweeps far beyond that narrow, program-integrity purpose, expanding federal collection and interagency sharing of citizenship data on people who aren’t even seeking federal aid themselves.

As Committee Members noted, this raises serious concerns about collecting more personal data than program administration requires, and about the risk that such data could be repurposed for immigration enforcement or other purposes. These aren’t hypothetical concerns. During the 2024–25 cycle, confusion over parental identity fields and the inability of parents without SSNs to sign the form contributed to a 36.6 percent year-over-year drop in FAFSA completions in California, with comparable declines in Texas, Nevada, and Tennessee. When otherwise eligible students don’t fill out the FAFSA out of fear for their families, enrollment declines, local economies suffer, and costs borne by state aid programs go up.

Mandating broader citizenship data collection from contributors will deepen the chill on mixed-status families, while doing nothing to address fraud. These changes are also proposed against a backdrop of the “public charge” rule, which has injected new fear and uncertainty into families’ use of public benefits.  A student’s Title IV eligibility does not rely on the citizenship status of their stepparent or spouse. It never has and never should. 

The bill advanced on a party-line vote, 19-13.

What Congress should do instead

There’s a better path forward, and it doesn’t require rebuilding the verification barriers of the past. We urge Congress to:

• Pause before codifying new verification mandates. Let the Department’s real-time fraud detection system operate and be independently evaluated (including by GAO) before layering new statutory requirements on top of it.
• Strike the massive expansion of powers to “audits, investigations, and other oversight activities” and tightly define “reasonable suspicion of fraud.” These undefined authorities and concepts should alarm all institutions of higher education about the implications, especially in today’s charged political environment.
• Reject expansions of citizenship-data collection beyond what Title IV eligibility requires. H.R. 7893’s sweep into all FAFSA contributors is a bad and deeply unfair policy that does nothing to protect taxpayers.
• Calibrate program-review triggers to actual patterns of institutional noncompliance. An isolated disbursement error shouldn’t land an institution on a prioritized program review list—and certainly not subject them to a limitless audit or investigation.
• Continue the bipartisan work of reducing verification burdens. Build on the FUTURE Act and FAFSA Simplification Act by limiting verification to applicants whose data are most likely to contain material errors, exempting continuing students whose prior-year verification produced no changes, and giving the Office of Federal Student Aid the funding and staffing it needs to run the FAFSA well.

This is a moment that calls for legislation to reduce the real costs families face and expand access to the aid Congress has already authorized. The package the House Education & Workforce Committee just advanced does neither.

Students deserve better. The Hope Center will continue working with Members of Congress on both sides of the aisle to protect the integrity of federal student aid without rebuilding barriers for the very students the Pell Grant was designed to serve.