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First on fox: The Department of Education has withheld more than $1 billion in student aid payments under President Donald Trump’s first year in office, including stopping suspected bots and “ghost stories” from receiving tax-deductible loans, FOX News Digital Digital.
Authorities say the savings come from new “enhanced” fraud controls the department implemented in June to fight fraudsters in college loan applications.
College authorities and cybersecurity experts in recent years have pointed to a new trough of “Ghost Bafunds,” which are applicants selected or allocated only to be registered, then disappear. Ghost readers are believed to be powered by AI bots or carried out by criminal networks using real American personal information.
Some scams involve the use of your deceased person’s identity to fraudulently obtain a loan.
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Cracking down on fraud, the Department of Education expanded its verification process for first-time applicants trying to get Federal student aid. The department said in June that the Biden administration had “removed enforcement resources and diverted resources from fraud prevention to illegal pardon efforts” amid the Covid-19 crisis, which included fraud schemes.
The Department of Education reported that more than $1 billion has been lost from fraudulent student loan scams. (Alejandra Villa Loarca / Newsday RM via Getty Images)
“American citizens have to bring an ID to buy a ticket to travel or rent a car – it’s only fair that they have to bring an ID to access tens of thousands of dollars in taxes to fund their education,” US Education Secretary Linda McMahon told Fox Digital on Thursday.
“From day one, the Trump administration is committed to reducing waste, fraud, and abuse throughout the government’s financial system,” he added.
The new verification process requires the first applicants to “be here, either in person or in a live video conference, approved, valid, approved, approved, government-issued documents approved by the state and the institution must maintain a copy of these documents.”
The verification measure prevented more than $ 1 billion from Floges to Deferred to Deferred Trafters, said the education department includes “multinational integrated fraud rings and AI BOTS impersonating students.”
The increased verification process that followed the offer of the Trump Administration revealed about $ 90 million removed from scammers by 2024, including $ 30 million removed from companies that are used as decorations as described by bots disguised as fake students.
Schools are turning to handwritten exams like AI to cheat to cheat
Recent data from the California Community College System, for example, revealed that 34% of applications for millions of dollars in Federal and State Aid are misdirected.
Local media reported in the spring of this year that Democrats and Republicans are working to deal with loan fraud in the state and to increase security measures, including a Democrat who wants a fraud investigation to find patterns of fraud.
“Ghost Student” AI Scams have infiltrated the college loan process, according to the Department of Education. (Stock Images / Getty Images)
The College district of the Footic-de aza Community Community received almost 26,000 requests, according to media reports in 2024, with twelve thousand set to be deceived before the start of the term. In Nevada, the College of Southern Nevada wrote off $7.4 million in the fall 2024 semester because of the “Student Student” scheme, media reports show.
ANOTHER “Spirit Students” in Minnesota left Riverland Community College with more than 100 fraudulent applications a year.
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Within the first week of the new verification process in June, officials say they have marketed the identities of nearly 150,000 students on the current Free Application for Federal Student Aid (FAFSA) and suspicious universities.
President Donald Trump speaks in the Oval Office at the White House Oct. 6, 2025, Washington, DC (Anna Moneymaker/Getty Images)
“Colleges and universities across the country have reported being besieged by sophisticated fraud rings and have asked the Trump administration for help,” the Department of Education said in a press release Thursday.
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In addition to issuing its enhanced security measures, the Department also published an online warning to families
