Student Aid Fraud Oversight and Accountability Act of 2026

The bill, titled the "Student Aid Fraud Oversight and Accountability Act of 2026," amends the Higher Education Act of 1965 to enhance oversight of federal financial aid disbursements. It requires the Secretary of Education to prioritize program reviews for institutions of higher education that disburse Title IV federal financial aid to students whose Free Application for Federal Student Aid (FAFSA) presents a reasonable suspicion of identity fraud . This measure aims to combat identity fraud within federal student aid programs by ensuring institutions take proactive steps to verify student identities. Starting October 1, 2026, the Secretary will identify institutions that disburse aid under such circumstances, based on the Secretary's identity fraud detection system. However, an institution will be excluded from this identification if it demonstrates that it verified the student's identity through in-person or live, synchronous audiovisual methods before aid disbursement, notified the Secretary, and maintained records of this verification. This identification serves to inform various oversight activities but does not, by itself, determine that an institution has failed to meet Title IV requirements.