No Aid for Ghost Students Act of 2026 in plain language
1: Short title
This section would give the Act the short title 'No Aid for Ghost Students Act of 2026.'
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1. Short title This Act may be cited as the No Aid for Ghost Students Act of 2026 .
2: Identity fraud detection system
This section would add a new identity fraud detection requirement to the Higher Education Act of 1965 and pair it with new institutional verification duties. First, it would amend section 483 of the Higher Education Act (the FAFSA application section) by adding a new subsection (e). Under this subsection, the Secretary of Education would have to use an identity fraud detection system to review every FAFSA application filed on or after October 1, 2026, to determine whether the application shows a reasonable suspicion of identity fraud. This review would happen in addition to, or together with, other verification processes already required under the Higher Education Act, not in place of them. If the Secretary determines that an application shows a reasonable suspicion of identity fraud, the Secretary would have to send the notices described next. The Secretary would have to notify the applicant of: the determination and the basis for it; the fact that the information sent to schools (described below) will be transmitted to every institution of higher education the applicant listed on the application; and the fact that the applicant is subject to the additional identity verification requirements in section 487(a)(15). Separately, the Secretary would have to notify each institution the applicant listed that the application shows a reasonable suspicion of identity fraud, and that the applicant is subject to identity verification requirements the institution must carry out under section 487(a)(15)(B) before the institution may disburse any federal financial aid to that applicant. The Secretary would also have reporting duties to the authorizing committees. Not later than November 1, 2026, the Secretary would have to submit to the authorizing committees a written description of the identity fraud detection system. Not later than 30 days after making any substantial change to the system, the Secretary would have to submit a written description of the change and the reasons for it. Not later than October 1, 2027, and annually after that, the Secretary would have to evaluate how effective the system is and submit a report on its use and effectiveness to the authorizing committees. Second, the section would amend section 487(a)(15) of the Higher Education Act, which lists conditions institutions must meet to participate in federal student aid programs. The existing acknowledgment requirement in that paragraph would be relabeled as subparagraph (A), without changing what it requires. A new subparagraph (B) would be added: beginning October 1, 2026, an institution could not disburse federal financial aid to an applicant whose application under section 483 has been found to present a reasonable suspicion of identity fraud under new section 483(e), unless the institution, following procedures the Secretary establishes, confirms the applicant's identity using in-person verification or live, synchronous audio-visual verification and on that basis determines that a reasonable suspicion of identity fraud is not present; notifies the Secretary that the applicant's identity has been verified; and keeps a record of that identity verification. All three of these conditions would have to be met before the institution could disburse the aid to that applicant. Finally, the section would require the Secretary of Education, not later than October 1, 2026, to establish guidelines for the identity verification procedures institutions of higher education must carry out under new subparagraph (B) of section 487(a)(15).
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2. Identity fraud detection system (a) Identity fraud detection system Section 483 of the Higher Education Act of 1965 ( 20 U.S.C. 1090 ) is amended by adding at the end the following: (e) Identity fraud detection system (1) In general In addition to or in conjunction with other verification processes carried out under this title, the Secretary shall use an identity fraud detection system to review each application submitted under this section on or after October 1, 2026, to determine whether the application presents a reasonable suspicion of identity fraud. If the Secretary determines that such an application presents a reasonable suspicion of identity fraud, the Secretary shall carry out notifications in accordance with paragraph (2) . (2) Notification of reasonable suspicion of identity fraud If the Secretary determines that an application submitted under this section presents a reasonable suspicion of identity fraud, the Secretary shall— (A) provide the applicant with notice— (i) of such determination and the basis for such determination; (ii) that the information described in subparagraph (B) will be transmitted to each institution of higher education designated by the applicant in the application; and (iii) that the applicant is subject to additional identity verification requirements in accordance with section 487(a)(15); and (B) transmit to each institution designated by the applicant in the application, a notice— (i) that such application presents a reasonable suspicion of identity fraud; and (ii) that the applicant is subject to identity verification requirements to be carried out by the institution in accordance with section 487(a)(15)(B), before the institution may disburse Federal financial aid under this title to such applicant. (3) Congressional notices and report (A) Notices The Secretary shall submit to the authorizing committees— (i) not later than November 1, 2026, a written description of the identity fraud detection system required under this subsection; and (ii) not later than 30 days after implementing any substantial change to such system, a written description and rationale for such change. (B) Annual evaluation and report Not later than October 1, 2027, and annually thereafter, the Secretary shall conduct an evaluation of the effectiveness of the identity fraud detection system carried out under this subsection, and submit to the authorizing committees a report on the use and effectiveness of such system. . (b) Additional verification requirements (1) Amendment Section 487(a)(15) of the Higher Education Act of 1965 ( 20 U.S.C. 1094(a)(15) ) is amended— (A) by striking (15) The institution acknowledges and inserting (15) (A) The institution acknowledges ; and (B) by adding at the end the following new subparagraph: (B) Beginning on October 1, 2026, the institution will not disburse Federal financial aid under this title to an applicant whose application under section 483 presents a reasonable suspicion of identity fraud under section 483(e), unless the institution, in accordance with procedures established by the Secretary— (i) determines that a reasonable suspicion of identity fraud is not present by confirming the identity of such applicant using in-person verification or live, synchronous audiovisual verification; (ii) notifies the Secretary that the identity of the applicant has been verified; and (iii) maintains a record of such identity verification. . (2) Institutional verification procedures Not later than October 1, 2026, the Secretary of Education shall establish guidelines with respect to identity verification procedures to be carried out by institutions of higher education under subparagraph (B) of section 487(a)(15) of the Higher Education Act of 1965 ( 20 U.S.C. 1094(a)(15) ), as amended by paragraph (1).