Students applying for financial aid will face stricter ID verification

Washington Post

a day ago

The Education Department on Friday announced new measures to verify the identities of people applying for financial aid — a move it says is needed because of rising fraud but is being met with mixed reactions from the higher education community.
The department said that this summer, colleges and universities must ensure that people who are applying for aid for the first time are who they claim to be, which will require students to submit more documentation. Applicants must present — either in person or on a live video call — a valid, government-issued photo identification to the school.
The department expects about 125,000 students to be affected by the new requirement.
The changes will be in place until the department's Federal Student Aid office finalizes a permanent screening process in the fall for anyone applying for federal loans and grants through the Free Application for Federal Student Aid. The department said it is stepping up identity verification amid an increase in scammers accessing millions of dollars in federal aid.
California's community colleges have reported being inundated with scammers posing as students and enrolling to steal aid, and lawmakers in the state are calling on the Education and Justice departments to investigate. An investigation by CalMatters found fraudsters are using artificial intelligence to pose as students and have stolen more than $10 million in federal financial aid over 12 months.
For its part, the Education Department said last month that it uncovered more than $30 million in aid being disbursed to thousands of deceased people in the past three years. A separate review in February found that nearly $40 million in loan payments and $6 million in grant awards were sent to ineligible people, according to the department.
'When rampant fraud is taking aid away from eligible students, disrupting the operations of colleges, and ripping off taxpayers, we have a responsibility to act,' Education Secretary Linda McMahon said in a statement Friday.
The Trump administration is partly blaming the increase in financial aid fraud on the Biden administration, which it claims removed verification safeguards and diverted resources from fraud prevention toward student loan forgiveness. The Education Department said it restarted a fraud modeling system that was deprioritized under President Joe Biden and found 150,000 accounts believed to be fraudulent in the initial run.
Biden administration officials relaxed some verification requirements during the coronavirus pandemic, requiring fewer college students from low-income households to provide additional proof that the information on their financial-aid applications was accurate. At the time, the department said it would focus on ferreting out identity theft and fraud. The decision was praised by financial aid and student advocacy groups, which said too many vulnerable students were caught up in the standard verification process, which yielded little evidence of fraud. They argued that focusing on identity theft, which requires a different form of verification, made more sense.
Students can face three types of verification, based on suspected errors or fraud: a standard one that requires the submission of income and tax documents, a custom one that requires identity documentation, or an aggregate one that requires everything.
In its latest report, from November, the department's office of inspector general said the agency had taken steps to address identity verification risks but could benefit from additional actions after investigators determined that roughly $27 million in federal student aid had gone to accounts suspected to be fraudulent. Advocacy groups say they want the department to root out fraud but caution against a return to the invasive, time-consuming audits of the past that routinely delayed students' financial aid.
'Protecting against fraud and abuse is important, but must be balanced against access,' said Elizabeth Morgan, chief external relations officer for the nonprofit National College Attainment Network. 'Barriers that delay students' ability to receive aid could harm their ability to attain a postsecondary degree.'
The department said it does not expect any changes to the number of financial aid applicants selected for the standard verification while the number of applicants flagged for identity verification goes up.
Financial aid groups are cautiously optimistic. Karen McCarthy, vice president of public policy and federal relations at the National Association of Student Financial Aid Administrators, said some colleges have hoped that the department would take a stronger role in fraud prevention because they are ill-equipped to handle it on their own. But she worries that there are few details about the agency's long-term plans and that, while the department finalizes requirements, more work could fall on financial aid officers, especially at under-resourced schools.
'The lack of clarity and specific timing about Ed's plan is concerning,' McCarthy said. 'Recent history has shown that they make promises of delivery of things that will help institutions, and then there is lag, and institutions are kind of stuck doing that additional work for quite some time.'
In her statement Friday, McMahon said the department is working to 'reduce the administrative burden on institutions.'