No Aid for Ghost Students Act of 2026

This bill amends the Higher Education Act of 1965 to enhance fraud prevention in federal student aid. It mandates that the Secretary of Education implement an identity fraud detection system to review every Free Application for Federal Student Aid (FAFSA) submitted on or after October 1, 2026, specifically looking for reasonable suspicion of identity fraud. If such suspicion is found, the Secretary must notify both the applicant, detailing the basis for the determination and additional verification steps, and the institutions designated by the applicant. Furthermore, the bill stipulates that institutions of higher education cannot disburse federal financial aid to applicants flagged for potential identity fraud until they conduct their own verification. This institutional verification must involve in-person or live, synchronous audiovisual confirmation of the applicant's identity, following procedures established by the Secretary. Institutions are also required to notify the Secretary upon successful verification and maintain records of the process, ensuring that aid is only disbursed to legitimate students.