No Aid for Ghost Students Act of 2026

This bill amends the Higher Education Act of 1965 to establish a new requirement for detecting identity fraud in federal student aid applications. Specifically, 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. If this system identifies a reasonable suspicion of identity fraud, the Secretary must notify the applicant of the determination and its basis, and inform them that additional identity verification will be required.

Furthermore, the Secretary must transmit a notice to each institution designated by the applicant, indicating that the application presents a reasonable suspicion of identity fraud and that the applicant is subject to institutional identity verification requirements. Institutions of higher education are then prohibited from disbursing federal financial aid to such applicants until they confirm the applicant's identity through in-person or live, synchronous audiovisual verification, following guidelines established by the Secretary. The bill also requires the Secretary to provide Congress with descriptions of the fraud detection system and annual reports on its effectiveness.