The U.S. Education Department’s (ED) new FAFSA identity verification screening system, first implemented in April, has so far rejected more than 53,000 fraudulent applications, preventing more than $212 million in financial aid from being disbursed to unscrupulous actors, according to the department’s top higher education official.
Speaking last Wednesday at ED’s inaugural Higher Education Fraud Summit, Under Secretary Nicholas Kent detailed the department’s efforts to curb fraud in student aid applications. Combined with enhanced verification measures implemented last summer and a new real-time data-sharing partnership with the Social Security Administration, the department’s new protocols have prevented more than $2 billion in fraudulent disbursements, he said.
“Our work here is just getting started, and we will continue to keep our foot on the gas,” Kent said.
While the $2 billion figure includes aid for applicants who would have been identified through institutions’ own fraud detection systems or verification protocols prior to disbursement, it highlights the enormous scope of the problem that, until this year, was shouldered almost entirely by colleges conducting identity verification on their own.
A word from OIG
Over the course of the day-long summit, which drew more than 800 participants, officials emphasized working closely with ED’s Office of Inspector General (OIG) to report instances of suspected fraud and identity theft. Acting Inspector General Mark Priebe shared that, in the past year, OIG investigations into large-scale, coordinated fraud rings have resulted in more than $35 million in restitution, settlements, fines and recoveries of federal financial aid dollars. He also highlighted how OIGs across agencies work with law enforcement to identify and prevent transnational fraud rings affecting multiple government programs.
While Priebe assured attendees that each complaint is assigned and investigated, he acknowledged that the office can and will do a better job of following up with institutions to close loops. Several participants asked for more guidance on how to submit helpful reports to OIG, and department officials agreed this would be useful information to provide for institutions.
