No Aid for Ghost Students Act of 2026
What changed between versions
Institutions may now carry out identity verification 'directly or through a contracted third-party service provider,' allowing them to outsource the process rather than performing it in-house.
Applicants flagged for reasonable suspicion of identity fraud are no longer notified of 'the basis for such determination.' They are only told that the determination was made.
The list of acceptable identity verification methods expanded from two (in-person or live synchronous audiovisual) to five: in-person, live video, NIST IAL2-compliant digital verification or equivalent successor, any Secretary-approved method providing equal or greater assurance, and combinations of two or more methods.
A new rule of construction (section 483(e)(4)) clarifies that the Secretary may satisfy the identity fraud detection system requirements using a capability or system already in use before the date of enactment, rather than being required to build a new system from scratch.
A new section 3 adds a program review priority category under Section 498A(a)(2) for institutions that have demonstrated a pattern of disbursing federal financial aid to students whose applications presented reasonable suspicion of identity fraud. Institutions can avoid this designation by demonstrating compliance with the verification requirements in section 487(a)(15)(B).
The identity fraud detection system is now described as screening and assessing applications 'based on one or more indicators associated with suspected fraud risk,' providing a clearer standard for how the system operates.
Added explicit timing requirement that institutions must complete identity verification and notify the Secretary 'before the disbursement of such aid.'
