NEWS: Senator Moody’s No Aid for Ghost Students Act Moves One Step Closer to Becoming Law

This bill, passed by the House of Representatives, is the direct companion legislation championed by Senator Moody in the Senate.

WASHINGTON, D.C.- Today, Senator Ashley Moody released a statement following the recent House passage of the No Aid for Ghost Students Act. This bill aims to stop fraudsters, often called "ghost students," from using stolen or fake identities to submit FAFSA applications and take federal student aid money. The bill was introduced by Rep. Burgess Owens in the House. Senator Moody is joined by Senators Tommy Tuberville and Maggie Hassan in sponsoring the bill in the Senate.

"Fraudsters should never be able to steal taxpayer dollars meant to help hardworking students pursue a higher education. This bill is a commonsense step to protect students and stop criminals from exploiting the FAFSA system with stolen or fake identities. This is a great step in the right direction, and I applaud my colleagues in the House of Representatives for passing this legislation, but there is still work to be done. I strongly urge my Senate colleagues to join us in this effort to combat fraud and swiftly pass this critical legislation," said Senator Ashley Moody.

BACKGROUND:

• The legislation amends the Higher Education Act to require the Department of Education (ED) and institutions of higher education to take steps to prevent fraud.
• Specifically, the No Aid for Ghost Students Act:
  • Requires ED to use an identity fraud detection system to review each FAFSA application to determine whether the application presents a reasonable suspicion of identity fraud.
  • Requires ED to notify the applicant if his or her FAFSA presents a reasonable suspicion of identity fraud and notify each institution designated on the FAFSA.
  • Requires institutions to verify an applicant's identity before disbursing federal student aid if the applicant's FAFSA is flagged for reasonable suspicion of identity fraud.

• Verification must occur through either in-person verification or live, synchronous audiovisual verification.
• Institutions must notify ED once the applicant's identity has been verified.
• Institutions must maintain a record of identity verification.
• Requires ED to establish guidelines for identity verification procedures that institutions must follow when reviewing FAFSA applications flagged for suspected identity fraud.

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