U.S. Department of Education

The U.S. Department of Education says enhanced fraud controls launched in June have thwarted more than $1 billion in attempted federal student‑aid fraud, including schemes involving “ghost students,” AI bots and coordinated international rings. The agency now requires first‑time applicants to verify a valid government photo ID in person or via live video with school officials, after identifying roughly $90 million improperly disbursed in 2024, including $30 million to deceased identities and more than $40 million tied to bot‑generated applications.

A proposed Education Department settlement would end the Biden-era SAVE repayment plan and force millions of borrowers — about 7 million enrolled, including roughly 4.6 million with $0 monthly payments — to resume paying or move to other plans. The department, which estimates SAVE would have cost taxpayers more than $342 billion over 10 years and cites a February 2025 court ruling that found the plan unlawful, says borrowers should use the Federal Student Aid Loan Simulator, and experts expect many may have to exit SAVE forbearance as early as next year, sooner than the July 1, 2028 OBBBA transition date.