Improved fraud detection is coming to the Free Application for Federal Student Aid (FAFSA) starting at the end of April. The changes are focused on making it harder for organized crime rings to steal federal financial aid funds.
The Office of Federal Student Aid (FSA) released full details of the enhanced fraud detection measures being implemented in an Electronic Announcement on April 15, 2026. The National College Attainment Network (NCAN) applauds the efforts by FSA to address FAFSA fraud. Reducing fraud ensures that Pell Grants funds are preserved to support the low-income students the program is intended to help, rather than being syphoned off by organized fraud rings.
Financial aid fraud has become an increasingly challenging issue for colleges, particularly community colleges. Scammers have frequently targeted community colleges by trying to impersonate students. Fraud rings file FAFSAs using fake student profiles that will qualify for Pell Grants, and state grant aid. Due to the relatively low tuition at community colleges, these fake students are more likely to get a refund of grant funds that scammers can steal.
How Will the New FAFSA Fraud Detection System Work?
The real-time identity verification enhancement measures will begin on April 26, 2026. The vast majority of students and families will experience no difference when completing the FAFSA. A small portion of students may have to take additional steps to verify their identity. A test of the system found that the vast majority of forms flagged for additional identity verification were in fact fraudulent, so the system seems to be working as intended. The real-time check should also reduce the amount of time colleges and universities have to spend verifying students’ identities. Using data submitted during the FSA ID creation and FAFSA process, applicants will be placed into one of four risk categories:
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High Risk – Applicants in this category will be required to confirm their identity as they are filling out the FAFSA. They will need to show proof of identity, such as a driver’s license, passport, tribal identification card, or permanent resident card, in real-time. Students will have to use a phone or tablet to complete the verification process. The system will capture their photo and confirm the authenticity of their identification.
If a student is completing the FAFSA on a desktop or non-mobile device, they will receive a QR code so they can switch to a mobile device. The student will be notified if the identity document or picture is blurry so that they can correct that problem immediately. This requirement will prevent bots and people misrepresenting themselves from successfully completing the form.
If a student is flagged as high risk and successfully verifies their identity, the institution will receive a comment code confirming verification was successful. If the applicant attempts to confirm their identity and is unsuccessful or does not attempt to do so, the institution will receive a comment code indicating the form was rejected. To receive federal student aid, applicants in this category will need to verify their identity with the institution of higher education. If a student completes the verification process at the campus level, the aid administrator will enter a fraud override code in a new field so that the student’s federal student aid can be processed.
Colleges will not be required to take any steps for the high and highest risk forms unless the student contacts the school. Starting on My 3, 2026, financial aid offices will be able to help legitimate students who are flagged as high or highest risk and cannot resolve the issue. Financial aid offices can resolve legitimate cases by verifying the student using the same process that currently exists for students selected for the V4 verification group.
Fraud Detection for Existing FAFSAs
FSA also plans to run a one-time fraud detection screening on all FAFSAs filed prior to launching the new real time process. If a current FAFSA demonstrates potential fraud, the student will be selected for identity verification, and the institution will need to complete the process to ensure the student is eligible for federal aid.
As a result of the implementation of this new system, the likelihood of a student being selected for V4 or V5 verification will be very minimal. NCAN supports advances like this that lead to a better user experience and reduce the number of students subject to the onerous identity verification process of the past. Please don’t hesitate to reach out to the NCAN team with any questions.