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Current State of US Export Controls in Response to the Russian Federation’s Invasion of Ukraine – As of December 5, 2025

Oren Warshavsky, Melissa Mannino, Lana Muranovic Recognized by Lexology Index Client Choice

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As discussed in a <a href="https://www.bakerdatacounsel.com/blogs/steps-colleges-should-take-to-bust-ghost-students/" target="_blank" rel="noreferrer noopener">prior blog post</a>, in recent years, educational institutions such as community colleges that have minimal application requirements have seen a steady rise in “ghost student” fraud. This fraudulent scheme involves cyber criminals using stolen or fake identities to apply to a college. Once admitted to the college, these ghost students apply for financial aid from the federal government. The government sends the aid to the school, which disburses it to the ghost student. This is a major issue, impacting community colleges across the country. Indeed, Federal Student Aid (FSA) has indicated that “the rate of fraud through stolen identities, particularly involving technologically advanced fraud rings, has reached a level that imperils the federal student assistance programs under Title IV of the Higher Education Act.”<a id="_ftnref1" href="#_ftn1">[1]</a>

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The burden of the ghost student epidemic does not only fall on FSA. Oftentimes, by the time a college discovers a ghost student, it will already have disbursed financial aid to that student. Upon discovery, the college is required to return the fraudulently acquired financial aid to the federal government, thus forcing the college to pay back the portion of the aid disbursed to the ghost student from the college’s own funds. Additionally, by enrolling in classes that they never actually attend, ghost students are taking spots in classes away from legitimate students.

Community colleges have been struggling to find ways to fight this fraudulent scheme while still maintaining their current admissions standards. On June 6, 2025, the U.S. Department of Education (ED) announced that FSA intends to implement an additional screening process this fall to combat the ghost student epidemic. In the interim, ED is requiring institutions of higher education to validate the identity of certain first-time applicants who enroll at the school.

New Requirements for Colleges and Universities

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Colleges and universities are no longer required to obtain a Statement of Educational Purpose<a id="_ftnref2" href="#_ftn2">[2]</a> from students who are selected for V4 or V5 verification.<a id="_ftnref3" href="#_ftn3">[3]</a>

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If an institution determines that an applicant is unable to appear in person to present an unexpired, valid, government-issued photo identification, the applicant now has the option of appearing on a video call to present an unexpired, valid, government-issued photo identification to an institutionally authorized individual who will review the identification. The applicant can still, but will no longer be required to, submit a copy of their identification document that is acknowledged in a notary statement or that is presented to a notary. The video call option will require the institution to maintain a scanned copy (electronic or hard copy) of the identification documentation that includes the date it was presented and the name of the authorized representative who reviewed the documentation. This can be accomplished through a screenshot of the video call that has legible details of the identification.

ED will consider a student’s identity to be verified if the student’s identity was verified by an entity that is compliant with the National Institute of Standards and Technology Identity Assurance Level 2. In this instance, an institution must retain documentation of the date that the student’s identity was verified and the entity that performed the verification. More information on these requirements will be provided in the future. 

ED will consider a confined or incarcerated student’s identity to be verified if the student’s identity was verified by a responsible official at the facility where the individual is confined or incarcerated. In this instance, an institution must retain as documentation an electronic or paper confirmation of the student’s identity verification, the responsible individual at the facility, and the name of the institutional authorized representative who performed the verification.

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Steps To Take if Fraud Is Detected

Colleges are also required to have a system to identify conflicting information in their records regarding a student’s eligibility to receive federal student aid. Institutions that identify misreported information or altered documentation to fraudulently obtain federal funds should do all of the following:

Report suspicions and provide any evidence to the Office of Inspector General (OIG) at  <a href="https://www.ed.gov/contact-us">https://www.ed.gov/contact-us</a>.

Report potential fraud ring complaints to the OIG’s encrypted complaint web portal at <a href="https://oighotlineportal.ed.gov/">https://oighotlineportal.ed.gov/</a>.

Withold disbursement of federal or state aid funds if the institution determines with certainty that an applicant has falsified their identity.

Preventing identity theft and fraud is always best accomplished through in-depth cybersecurity and data privacy policies and processes including an adequate verification process. When institutions cannot verify a student’s identity in person, they should consider verification via a video call with the student. Moreover, institutions should continuously evaluate the effectiveness of the policies and procedures they have in place to prevent identity theft and fraud and update those policies accordingly. Finally, institutions should stay tuned for the new additional screening process that FSA intends to release this fall.

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<a href="#_ftnref1" id="_ftn1">[1]</a> <a href="https://www.ed.gov/about/news/press-release/us-department-of-education-implement-new-identity-validation-processes-combat-student-aid-fraud">https://www.ed.gov/about/news/press-release/us-department-of-education-implement-new-identity-validation-processes-combat-student-aid-fraud</a>.

<a href="#_ftnref2" id="_ftn2">[2]</a> A Statement of Educational Purpose is a document students sign to verify their identity and affirm they will use their federal student aid for legitimate educational expenses<a>.</a>

<a href="#_ftnref3" id="_ftn3">[3]</a> Students who are selected for verification (i.e., applicants flagged for potential identity theft) by ED will be placed in one of three verification groups (V1, V4 or V5) to determine which FAFSA information must be verified. V1 is the standard verification group, V4 is the custom verification group, and V5 is the aggregate verification group. V1 verification requires the student to verify certain items such as adjusted gross income, income tax paid, family size, etc. However, both V4 and V5 verification require the student to verify their identity.

US Department of Education Updates Verification Options in Fight To Stop Ghost Student Epidemic

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