Great work by @usedgov and @DOGE taking action on long-running fraud in federal student aid estimated to cost taxpayers > $1B/year and contributed to shortfalls in education funding available to low income students.
— Department of Government Efficiency (@DOGE) June 6, 2025
The Dept. Of Education disburses $120 billion in student aid…
Great work by
@usedgov
and
@DOGE
taking action on long-running fraud in federal student aid estimated to cost taxpayers > $1B/year and contributed to shortfalls in education funding available to low income students.The Dept. Of Education disburses $120 billion in student aid per year between Pell Grants and loans.
The fraudsters (largely international crime rings):
- Use stolen SSNs to sign up for online classes at secondary institutions
- Use the same SSNs to receive federal student loans or Pell Grants
-Use a chatbot to “show up” for the first few days of classes
-Pocket a portion of the money (which is sent from the federal government to the school to the fake students)
-DisappearIt is estimated that over 20% of online community college enrollments per year are siphoning off Pell grant money meant for low income students.
The Dept. of Education, starting next week, has now instituted mandatory identity checks for all first-year students receiving financial aid. DOGE and Ed are actively working on a technology-based solution now that will be deployed ahead of next year’s loan season.
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