A senior official in President Donald Trump’s Department of Education is drawing new attention to what he says is widespread abuse of federal student aid programs—particularly in Democrat-run states—prompting a renewed crackdown aimed at protecting taxpayers and legitimate students.
According to the Department of Education, federal officials blocked more than $1 billion in attempted student aid fraud in 2025, part of a broader effort by the Trump administration to strengthen oversight of taxpayer-funded programs. Education Under Secretary Nicholas Kent said the schemes drain public resources and disproportionately harm low-income Americans who rely on aid to pursue higher education.
Kent identified California as a long-standing hotspot for fraud and said Minnesota has also emerged as a growing concern.
“California has clearly been a center for fraud, waste, and abuse,” Kent said in an interview. “But we’re also seeing troubling indicators coming out of Minnesota, where significant problems have surfaced under current state leadership—issues the federal government has been flagging for months.”
Kent emphasized that the cost of fraud goes far beyond government balance sheets. He explained that funds lost to criminal activity could have helped thousands of students afford college.
“To put this into perspective, that money could have supported roughly 1,700 Pell Grants for low-income students,” Kent said. “Those are real students who need help getting through school, and instead that money was stolen.”
Federal data shows that between 2024 and 2025, scammers stole at least $10 million in federal financial aid from California community colleges. One analysis found that approximately 34 percent of applications submitted last year showed signs of being fraudulent.
Kent said many of these cases involve what officials call “ghost students.” These individuals never intend to complete coursework or earn a degree. Instead, they enroll briefly, collect federal aid, and disappear.
“They sign up, receive the money, may attend one or two classes, and then vanish,” Kent explained. “Their sole purpose is to exploit the system.”
He also warned that artificial intelligence is making fraud easier by allowing criminals to submit large numbers of applications simultaneously, sometimes from overseas.
To combat the problem, the Trump administration has introduced stricter safeguards—starting with identity verification.
Over the summer, the Department of Education implemented enhanced security measures on the FAFSA application, including mandatory ID verification for first-time applicants. The goal, Kent said, is to ensure that every applicant is a real person—not a fake identity or automated system.
Kent said it was “astonishing” that such safeguards were not previously required.
“We’re now stopping a substantial amount of fraud before taxpayer dollars ever leave the door,” he said.
Kent also noted that colleges themselves can sometimes benefit financially from higher enrollment numbers, even when fraud is present.
“That’s why institutions are being held accountable,” he said. “If fraud is happening on your campus, you should know it—and you should be taking steps to stop it.”
Affordability remains a central focus of President Trump’s education agenda, Kent added, but that goal depends on ensuring taxpayer money goes to deserving families.
“Taxpayers expect their money to help students who are playing by the rules,” he said. “Criminals do not deserve it, and we will pursue them accordingly.”
Officials in Minnesota responded by saying federal aid verification is handled at the federal and institutional levels, not by state agencies. California education officials said they are expanding identity-verification tools and using AI-assisted systems to flag suspicious applications more quickly.
Despite those assurances, Kent made clear that the administration views the issue as a serious failure of oversight in certain Democrat-led states.
“This is about accountability,” he said. “It’s about protecting taxpayers, protecting students, and restoring trust in federal programs—and this administration is committed to doing exactly that.”