The House passed a bill led by Utah Rep. Burgess Owens looking to crack down on so-called “ghost students,” a nationwide scheme wherein individuals are stealing identities and enrolling in schools to qualify for federal financial aid — then disappearing once they pocket the cash.
The No Aid for Ghost Students Act passed in a bipartisan vote on Wednesday, with 36 Democrats joining all Republicans in approving the measure. All four members of Utah’s House delegation voted in favor.
“Education is the great equalizer, but for too long, fraudsters have been siphoning federal student aid by using fake identities to take advantage of a system without proper guardrails. That needs to stop,” Owens said in a statement last week. “Every tax dollar stolen is a dollar that does not go to the student who actually needs assistance the most.”
The bill has the backing of the Department of Education, which issued a statement in support of the legislation after its passage.
“The previous Administration turned off nearly every single fraud prevention measure, allowing billions of taxpayer dollars to be stolen by ‘ghost students’ and other criminals,” Education Secretary Linda McMahon said in a statement. “The No Aid for Ghost Students Act would build on our efforts that prevented more than $1 billion dollar in student aid fraud and ensure that no future Administration can be derelict in their duties to protect students and American taxpayers.”
The bill now heads to the Senate for consideration.
What does the bill do?
The No Aid for Ghost Students Act would require the Department of Education to implement an identity-fraud detection system to screen every applicant seeking aid under the Free Application for Federal Student Aid, or FAFSA. The department would also be required to conduct annual audits of the system to ensure its accuracy and report those findings back to Congress.
The detection system would be designed to flag applications as suspicious, requiring schools to notify the applicant and require him or her to prove their identity through additional means. That could be through in-person verification or “live, synchronous audiovisual verification,” according to the bill text.
Federal aid would not be disbursed until that verification is completed.
The proposed system comes as more schools report concerns about ghost students, particularly at community colleges or online schools with open enrollment. Several factors have made student fraud easier, including the rise in online courses, increased availability of federal aid and AI bots making it easier for identity thieves to submit applications on a larger scale.
The identity fraud system would be implemented on or after Oct. 1, 2026, according to the bill. It would require McMahon to establish guidelines for the system before that date.
The Education Department has already been developing a system to detect identity theft for financial aid, although Owens has argued those guardrails must be passed as federal law to be made permanent.
“The Department of Education has started taking efforts to address this fraud and has prevented more than $1 billion in financial aid fraud last year,” he said. “But current law does not require the department to maintain these safeguards.”