The U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) identified about $270 million in suspicious financial activity potentially linked to fraud against federal student aid programs. The agency referred its findings to federal investigators.
Treasury Secretary Scott Bessent said the department is working with financial institutions and law enforcement to identify fraud schemes, recover stolen funds and hold those responsible accountable.
Education Secretary Linda McMahon said a new FAFSA fraud detection tool was introduced earlier this year to stop fraud at the start of the federal student aid process. She said cooperation with the White House Task Force to combat fraud, waste and abuse had saved American taxpayers more than $2 billion in less than two years.
In July, FinCEN warned financial institutions about student aid fraud and asked them to report suspicious activity. Since the alert, institutions have filed nearly 100 suspicious activity reports. FinCEN’s review identified more than 20,000 potentially suspicious transactions dating from February 2026.
FinCEN said the reports do not provide a complete picture of the scope of suspicious activity. The information was referred to law enforcement as leads for further investigation.
Fraud schemes can involve criminals using stolen personal information to enroll fake students, or paying real people for their details and keeping the aid refunds issued in their names. In some cases, school employees help recruit these so-called straw students or alter school records.
The schemes drain grant funds intended for eligible students and may prevent legitimate students from enrolling in classes occupied by fake enrollees. People whose identities are stolen may also be left responsible for debts they never incurred.
