Summary Report, Federal Student Aid’s Actions to Mitigate Risks Associated with the FSA ID Account Creation Process

We conducted a review to determine the Federal Student Aid office’s (FSA) actions to mitigate risks associated with the verification of identities in the FSA ID account creation process. Although we found that FSA had implemented controls to address identity verification risks associated with FSA ID account creation, it could take further actions by implementing preventive controls to better protect Title IV funds and the public from fraudulent activity. We found that approximately $27.3 million in Title IV funds was disbursed to suspected fraudulent FSA ID accounts. Further, although FSA has taken several steps to mitigate other risks to FSA ID accounts, these controls mitigate risks after the FSA ID account has been created and do not mitigate risk associated with the creation of the FSA ID account. We also identified a data reliability issue with the National Student Loan Data System data.