The House Education and Workforce Committee on Tuesday reported out three pieces of legislation to address financial aid fraud.
Two of the bills passed with bipartisan support. The core bill, the No Aid for Ghost Students Act of 2026, requires the Education Department (ED) to proactively identify financial aid applicants who exhibit patterns associated with fraud when a student submits a Free Application for Federal Student Aid (FAFSA).
The bill also requires institutions to adhere to ED requirements relating to preventing Title IV fraud, which, under existing policy, will consist of running V4/V5 identity verification before distributing any aid to a student whose FAFSA is initially rejected by ED for having a high likelihood of fraud. As such, the bill codifies existing ED policy in this area, as of spring 2026.
A second bill, the Student Aid Fraud Oversight and Accountability Act, would require ED to prioritize for program reviews institutions that have not been compliant with identity verification policies. Committee members agreed that, as the legislation moves forward, small modifications may be made to better reflect congressional intent — in part, to ensure that enforcement actions focus on institutions with a pattern of non-compliance, rather than just an individual case.
Challenges for community colleges
The debate on the fraud legislation touched on community colleges. Ranking Member Bobby Scott (D-Virginia) noted an increase in fraud at low-cost institutions such as community colleges. He said that student aid verification processes are time-consuming and costly, and that it is important to provide guidance about how colleges should comply.
Rep. Kevin Kiley (R-California) said that there was a “staggering amount of fraud” at community colleges, and that one of his local community colleges has seen a tripling of applicants. He also commented that state government in California has been “missing in action,” and that the college had been left to tackle the problem itself, expending significant resources that other colleges across the country may not have.
Despite this, an amendment offered by Scott to provide additional funds to institutions to help combat fraudulent efforts was defeated.
Companion bills for these pieces of legislation have not yet been introduced in the Senate, but if the legislation is approved overwhelmingly by the House (possibly under “suspension of the rules”), it is possible that the Senate will take up the bill without going through the regular committee process.
Providing citizenship status on FAFSAs
A third piece of legislation was passed, but with only Republican votes. The bill would require all contributors to a student’s financial resources who are listed on a student’s FAFSA to provide their citizenship status as part of identity verification. Currently, some contributors, including step-parents and spouses, are not required to provide this information.
While the citizenship status of a student’s contributors doesn’t affect his or her financial aid eligibility, Democrats raised concerns around data privacy and security, whether data would be shared across agencies to inform immigration enforcement actions, and a potential chilling effect on aid applicants from mixed-status families.
* * *
David Baime is senior vice president for government relations at the American Association of Community Colleges (AACC).
Kathryn Gimborys is a government relations manager at AACC.
