The Trump-McMahon Department of Education (ED) has prevented over $1 billion in student aid fraud this year by increasing identity verification measures that had been deliberately dropped under the Biden administration. Massive amounts of taxpayer money were obtained fraudulently under the guise of student loans.
“The Biden Administration’s decision to require identity verification from less than one percent of students created a prime opportunity for fraudsters to exploit the Free Application for Federal Student Aid (FAFSA®) process and steal taxpayer funds,” ED declared in a press release Dec. 11. The press release added that colleges and universities had requested help in increasing measures to prevent more fraud.
But the question is, what to do about the fraud that has already occurred? As a victim of student aid fraud through identity theft this year, I was able to see up close how easy it was to obtain taxpayer money under false pretenses, and how difficult to catch the fraudster.
Sophisticated fraud rings quickly figured out how to exploit the weaknesses to their advantage, ED noted. U.S. Secretary of Education Linda McMahon said, “American citizens have to present an ID to purchase a ticket to travel or to rent a car – it’s only right that they should present an ID to access tens of thousands of taxpayer dollars to fund their education.” No kidding. First-time student aid applicants once again have to prove their identity, which has significantly cut down on fraud. But countless Americans are still dealing with the aftereffects of the previous fraud.
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I have a personal stake in this because, as said above, I have spent almost this entire year fighting with the Department of Education, and particularly its loan servicing contractor Nelnet, because someone took advantage of the reduced verification to steal my identity and take out thousands of dollars of student loans for a university neither I nor the stranger — apparently — ever attended.
For the fraudster, it was as simple as putting down my name, address, and Social Security number with a whole lot of fake personal information and a typed “signature.” That person then received thousands of dollars in taxpayer money, and only God knows for what he used it. Since then, I have filed a police report and obtained two separate letters from investigations at the university for which the loans were allegedly taken out, confirming my identity was stolen. I have filed paperwork with credit entities, LifeLock, ED, and Nelnet — for Nelnet, three separate times.
The third time, I had to resubmit the paperwork, because Nelnet decided despite all the evidence that I was going to be held liable anyway, and erased almost everything that I had submitted to them over about six months, telling me I had to begin the investigation over again. ED is now threatening to destroy my credit because I am about to “default” on my loan. Nelnet says they’re just restarting the investigation, and maybe if I am lucky, they will resolve it before my credit is permanently crippled.
The point of all this is not just a complaint, but rather to highlight how incredibly destructive student aid fraud can be. The reality is that the Biden administration made it so easy to commit fraud that with only two or three accurate personal details from a victim, an individual could apply for thousands of dollars in student loans, use them for something that had nothing to do with school, and leave the victim in the lurch, while all the entities involved blamed the victim. I am absolutely certain that there are thousands of other people like me, perhaps even hundreds of thousands, who are going through the same nightmare.
And the question is, will ED now focus on resolving those issues? What will be done to address the massive amounts of fraud that already happened?
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