Fraud Advisory: Potential Fraud Involving FAFSA from Dependent Students with Unusual Parent Data

In March 2025, we identified and conveyed to the Department suspicious activity related to parent information used on multiple dependent student Free Application for Federal Student Aid (FAFSA) forms. At the time, FSA flagged these students for identity verification and we issued “Fraud Watch Issue 1: Potentially Fraudulent Activity Involving Parent Information Included on FAFSA.” In June 2025, we initiated analysis of additional data and ultimately found that this pattern of activity involving dependent students with unusual parent data on the FAFSA had continued. We determined that 12,026 dependent student identities submitted FAFSAs associated with 1,991 parent identities where it is unlikely that the student and parent are related or associated. As a result, these FAFSA submissions have a high likelihood of being fraudulent—a potential loss of almost $3.5 million in Federal student aid associated with these FAFSA submissions during award year 2024–2025. We recommend that FSA (1) work with the IRS to implement additional controls to detect and prevent the misuse of stolen identities on FAFSA submissions, especially fraud schemes involving the use of potentially stolen student identities and nonrelated, potentially stolen parent identities.  And (2) conduct risk-based verification and validation procedures at the time FSA IDs are created. This can prevent the improper disbursement of Federal student aid based on fraudulent FAFSA submissions containing stolen identities.