The US House of Representatives passed the No Aid for Ghost Students Act on June 10 by a vote of 249 to 172. The bill requires Federal Student Aid (FSA) to implement a system to protect against identity fraud. It also targets for review institutions that have demonstrated a pattern of disbursing aid to students with a reasonable suspicion of identity fraud. This bill combines H.R. 7892 and 7891, which were approved by the House Committee on Education and the Workforce in March. Notably, this bill does not include The FAFSA Verification Act, which requires FSA to verify the social security number and citizenship status of everyone who contributes to or completes a FAFSA.
Thirty-six Democrats joined all Republicans in voting for the bill. Ranking Member Bobby Scott (D-VA), the lead Democrat on the House Committee on Education & the Workforce, opposed the bill citing concerns about the US Department of Education (the Department) weaponizing the system to deny colleges and universities student aid. “The bill would give the Administration another tool to further target colleges by allowing the Department to initiate and conduct program reviews based on little evidence,” he said in a statement.
What does it mean for students?
"Ghost students" are criminals who impersonate higher education students, enroll in courses, and receive federal financial aid that they then steal. The problem has grown since 2019, fueled in part by the expansion of online courses. The No Aid for Ghost Students Act would require the Department to screen every FAFSA for signs of identity fraud starting October 1, 2026. Flagged applicants would have to verify their identity in person or over live video before any college could release federal student aid to them.
The Department has recently launched a system to detect identity theft in financial aid applications, which it claims has prevented $100 million in fraudulent student aid from being disbursed. This bill seeks to codify and make such a system permanent. The Department would also be required to establish guidelines for institutions on how to conduct that verification and to report annually to Congress on the effectiveness of the fraud detection system.
For NCAN members working directly with students, the key question is about how the system works in practice. Identity verification requirements can create barriers for legitimate students, particularly first-generation and low-income applicants who may lack a driver’s license or any government-issued ID. Students who are flagged incorrectly, or who don't know they've been flagged, might abandon their application or could see delays in receiving aid that jeopardize their enrollment.
If the bill moves to the Senate, NCAN will be watching to ensure that any final version includes strong protections to minimize false positives and clear, accessible processes for students and institutions of higher education to resolve flagged applications quickly.