California Tops List of States With Highest Student Aid Fraud at $171 Million

The Big Number: $1 billion — that’s how much the Department of Education says it saved taxpayers by cracking down on student aid fraud over the past year.Why It Matters: The Department of Education announced that its identity verification requirements for first-time FAFSA applicants, launched in summer 2025, have blocked more than $1 billion in fraudulent federal student aid. The fraud prevention push came after colleges and universities across the country reported being targeted by sophisticated fraud rings that exploited weakened safeguards during the Covid-19 pandemic.That created openings for criminals to file fake FAFSA applications and siphon Pell Grants and federal student loans meant for legitimate students and families.