The Department of Education reported that it has thwarted more than $1 billion from alleged scammers leveraging student loans. (Alejandra Villa Loarca/Newsday RM via Getty Images)
"American citizens have to present an ID to purchase a ticket to travel or to rent a car — it’s only right that they should present an ID to access tens of thousands of taxpayer dollars to fund their education," U.S. Secretary of Education Linda McMahon told Fox Digital Thursday.
"From day one, the Trump Administration has been committed to rooting out waste, fraud, and abuse across the federal government," she added. "As a result, $1 billion in taxpayer funds will now support students pursuing the American dream, rather than falling into the hands of criminals. Merry Christmas, taxpayers!"
The new verification process requires first-time applicants to "present, either in person or on a live video conference, an unexpired, valid, government-issued photo identification to an institutionally authorized individual and the institution must preserve a copy of this documentation."
The verification measure has thwarted more than $1 billion from flowing to suspected fraudsters, which the Department of Education said includes "coordinated international fraud rings and AI bots pretending to be students."
The increased verification process followed the Trump administration uncovering nearly $90 million that was disbursed to suspected scammers in 2024, including $30 million in loans to dead people and more than $40 million disbursed to companies using bots disguised as fake students.
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Recent data from the California Community College System, for example, indicated that 34% of community college applications in 2024, resulting in millions of dollars in federal and state aid being misdirected.
Local media reported in the spring of this year that Democrats and Republicans alike were working to address loan fraud in the state and heighten security measures, including a Democratic assembly member calling for a state audit to identify fraud patterns.
The Department of Education thwarted more than $1 billion in student aid fraud under President Donald Trump's first year in office. (Anna Moneymaker/Getty Images)
"Colleges and universities across the country reported being under siege by highly sophisticated fraud rings and requested the Trump Administration for help," the Department of Education said in a press release on Thursday.
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In addition to rolling out its heightened security measures, the department has also published materials online warning families against "fake college websites to trick students with AI-generated content and false promises designed to seem real" and is in the midst of hiring a "new fraud detection team within FSA that will be responsible for combatting fraud and abuse."
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https://www.foxnews.com/politics/trump-admin-drops-hammer-ghost-students-claws-back-1b-from-alleged-loan-scammers