Sponsors (2)
The bill strengthens protections against identity-fraud in federal student aid and incentivizes stronger identity checks at colleges, but does so at the cost of added administrative burdens and the risk of delayed aid or audit exposure for some students and institutions.
Students and taxpayers face lower risk of identity-fraud and improper Title IV payments because institutions that disburse aid to suspicious FAFSA applicants will be flagged for review, helping recover or prevent improper payments.
Colleges and universities that adopt in-person or live audiovisual identity verification can avoid being flagged, creating an incentive for stronger identity-verification practices across institutions.
Students who are mistakenly flagged as identity-fraud risks may experience delays receiving Title IV aid if institutions adopt stricter verification or pause disbursements, harming timely access to funds.
Colleges and universities may incur increased administrative burdens and costs to implement Secretary-prescribed in-person or live audiovisual identity verification and maintain records, potentially diverting resources away from student services or instruction.
Institutions flagged under the automated system could face heightened program reviews or audits, creating reputational and financial risk even when a flag alone does not prove noncompliance.
Based on analysis of 4 sections of legislative text.
Requires the Department to flag institutions that disbursed Title IV aid after Oct 1, 2026 to FAFSA applications flagged for identity-fraud suspicion unless the school verified identity in person or by live video and kept a record.
Introduced March 12, 2026 by Glenn Thompson · Last progress March 12, 2026
Adds a new oversight trigger to the Higher Education Act so the Department of Education will identify colleges and other Title IV institutions that disbursed federal student aid on or after October 1, 2026 to FAFSA applications that the Department’s identity-fraud detection system flagged as having a reasonable suspicion of identity fraud. Institutions are excluded from that identification if, before disbursing aid, they verified the applicant’s identity in person or by live synchronous audiovisual methods under Secretary-established rules, notified the Department, and kept a record of the verification. The identification can be used to inform reviews and audits but does not by itself mean the institution failed to meet federal requirements.