- The U.S. Department of Education (ED) found that nearly $90 million in federal student aid was wrongly distributed over three years, including $30 million to deceased individuals.
- Improper payments included nearly $40 million in Direct Loans and $6 million in Pell Grants to recipients who were ineligible due to identity theft, immigration status or being deceased.
- A $10 million error was linked to a lapse in the National Student Loan Data System’s post-screening process, which failed to alert aid offices of eligibility changes.
- The Office of Federal Student Aid is working with law enforcement to investigate fraud and is encouraging students to report scams and identity theft.
- To prevent future errors, ED has resumed several oversight tools, including identity verification protocols and the post-screening system for FAFSA cycles through 2026.
The U.S. Department of Education (ED) has revealed that nearly $90 million in federal student aid was improperly disbursed over the past three years, including payments made to thousands of ineligible recipients – among them, individuals who were already deceased.
According to a comprehensive analysis, released on May 28, a cross-check with the Social Security Death Index uncovered that more than $30 million was issued to individuals listed as deceased. The department also found numerous instances of identity theft and immigration-related ineligibility. (Related: Musk’s DOGE Army saves taxpayers $1 billion as they storm «WOKE» Department of Education.)
For instance, the review showed that nearly $40 million in Direct Loans and $6 million in Pell Grants went to recipients who did not meet eligibility requirements. Some of the aid was given to individuals granted temporary immigration parole status, who are not immediately eligible for federal student aid.
Moreover, an additional $10 million in improper Direct Loan disbursements was tied to a lapse in the National Student Loan Data System’s post-screening process, which notifies financial aid offices when a student’s eligibility changes or federal borrowing limits have been reached.
The Office of Federal Student Aid is now actively collaborating with law enforcement to investigate and prosecute instances of fraud while urging students and families to visit StudentAid.gov/scams for resources on identifying fraud and protecting against identity theft.
However, the department did not release detailed information on the specific causes of the improper payments or the total number of affected recipients.
Education Department reinstates several oversight tools to restore accountability in the student aid system
In line with this, ED has unveiled sweeping initiatives to restore oversight and accountability, while closing existing vulnerabilities in the federal student aid system.
The department has reinstated several oversight tools that had been paused or scaled back during the pandemic and the Biden administration, periods wherein «accountability was de-prioritized.»
As of May, the National Student Loan Data System’s automated post-screening process has been resumed for the 2024-2025 and 2025-2026 Free Application for Federal Student Aid (FAFSA) cycles. The tool helps ensure student aid is not distributed to borrowers who exceed eligibility limits or whose status has changed. Officials estimate that the system’s earlier suspension contributed to $10 million in erroneous Direct Loan payments.
In March, the department reinstated identity verification protocols that flag suspicious FAFSA applications, following the improper payments totaling nearly $46 million awarded to recipients who were ineligible due to their immigration status. These flags are triggered by data models that detect anomalies or signs of potential fraud.
Education Secretary Linda McMahon supported this reinstatement and emphasized the need for tighter controls at every stage of the financial aid process.
«As we continue to rehabilitate the student loan portfolio, we must also ensure there are accountability measures at every step,» McMahon said. «From start to finish, filling out the FAFSA form to loan repayment, the American taxpayer underwrites federal student aid programs. We are committed to protecting and responsibly investing their hard-earned dollars.»
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Watch the video below that talks about the Trump administration’s move to dismantle ED.
This video is from the Neroke-5 channel on Brighteon.com.
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