This White House is looking under every rock. And it’s not pretty what they’re finding.
Now the Trump admin uncovered massive fraud that Democrats let run rampant for years.
Trump Education Department Halts Over $1 Billion in Student Aid Fraud
In President Donald Trump’s first year, the Department of Education has blocked more than $1 billion in fraudulent federal student aid from reaching criminals, a milestone achieved by cracking down on sophisticated “ghost student” schemes and AI-driven bots, Fox News Digital has learned exclusively.
The breakthrough comes from enhanced identity verification protocols introduced in June 2025, which require first-time applicants for federal student aid to present valid, government-issued photo ID either in person or during a live video conference with an authorized school official who must retain a copy of the document.
From “Ghost Students” to International Crime Rings
Fraudsters had exploited the system by creating entirely fictitious identities, hijacking real Americans’ personal information, or even using the Social Security numbers of deceased individuals to enroll nonexistent students, trigger Pell Grants and loans, and disappear with the money. Many of these operations were powered by artificial intelligence or run by overseas criminal networks.
The department says the Biden administration had stripped away key verification safeguards during the COVID-era push for mass loan forgiveness, leaving the program especially vulnerable. In 2024 alone, nearly $90 million had already been disbursed to scammers, including $30 million in loans issued to dead people and more than $40 million captured through bot-generated fake enrollments.
A Rapid and Decisive Impact
Within the first week of the new rules, nearly 150,000 suspicious applications were flagged and colleges were alerted immediately.
Secretary of Education Linda McMahon celebrated the results, declaring that American taxpayers should have to show ID for tens of thousands of dollars in aid just as they do to board a plane or rent a car.
“From day one, the Trump Administration has been committed to rooting out waste, fraud, and abuse across the federal government,” McMahon said.
“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!”
Colleges nationwide had reported being overwhelmed by highly organized fraud rings and begged for federal intervention.
The department is now standing up a dedicated fraud-detection team inside Federal Student Aid and has launched public campaigns warning families about fake college websites that use AI-generated content to steal identities.
With the new safeguards in place, more than a billion dollars that would have vanished into criminal hands is instead flowing to legitimate students, marking one of the swiftest and most tangible wins against government waste in the Trump administration’s opening year.
