Resuming Identity Verification Flags
On Feb. 23, 2025, the U.S. Department of Education (Department) resumed flagging applicants that meet defined criteria for potentially fraudulent activity, including applicants suspected to be assuming another individual’s identity when submitting a 2024–25 and 2025–26 Free Application for Student Aid (FAFSA®) form. In these cases, schools will receive newly generated Institutional Student Information Records (ISIRs) with applicable Verification Tracking flags. These flags will require schools to complete the V4 or V5 verification process to verify the student’s identity and determine their eligibility for Title IV funds. Any newly generated ISIRs with Verification Tracking flags as a result of this release are consistent with the manual reports uploaded to a school’s FTI mailbox in the Student Aid Internet Gateway (SAIG), as noted in GENERAL-24-84 in July 2024.
Schools are reminded that they must complete verification for these students before disbursing Title IV funds and may not make subsequent disbursements of Title IV funds for students that are selected for verification after a disbursement has occurred. If the student does not complete verification, the school is not liable for any Title IV aid it disbursed prior to receiving the subsequent ISIR transaction (group V4 or V5). The student is liable for the full amount because, without completing verification, there is no evidence they were eligible for that aid. As schools work with students to complete verification, they should report suspected cases of identity theft to the Department’s Office of the Inspector General (OIG), per the guidance below. Please also review Chapter 4 of the Federal Student Aid Handbook’s Application and Verification Guide for more information on verification of these cases.
In Spring 2025, the Department will start to generate ISIRs, flagged for other issues that may require verification, or the resolving of relevant comment codes for applicants assuming identities presumed to be deceased and those permanently or temporarily precluded from receiving aid due to drug-related offenses. We will issue an update to this announcement when those functions are released. Finally, functionality allowing financial aid administrators to report V4/V5 verification results manually or via batch files has been delayed until after the release of 2026-27 application.
Reporting Suspected Instances of Fraud
Schools and other partners are reminded of guidance for reporting fraud and required reporting related to the administration of Title IV programs, as listed under 34 CFR 668.16(g). In general, if you suspect that a student, employee, or other individual connected to your organization has misreported information or altered documentation to fraudulently obtain federal funds, you are required to report these cases to the OIG. Common misconduct includes, but is not limited to, false claims of independent student status, false claims of citizenship, use of false identities, forgery of signatures or certifications, and false statements of income. Schools must also refer to the OIG any third-party servicer who may have engaged in fraud, breach of fiduciary responsibility, or other illegal conduct involving Title IV programs.
Additionally, institutions must submit complaints about fraud rings to the OIG via their encrypted portal at OIGhotlineportal.ed.gov. The portal provides consistency and improves communication delivery. For more information about how to report fraud rings or for a copy of the Fraud Ring Reporting Spreadsheet, please review the Aug. 21, 2020 Electronic Announcement.
It is always appropriate for a financial aid administrator to consult with an institution’s legal counsel prior to referring suspected cases of fraud or misconduct to an agency outside of the institution. Referrals to the OIG are also mentioned in the Application and Verification Guide.
OIG Contact Information
Address: OIG Headquarters, U.S. Department of Education, 400 Maryland Avenue, SW, Washington, DC 20202-1500
Web: oig.ed.gov/contact-us
Hotline: oig.ed.gov/oig-hotline
Phone: 1-800-MIS-USED (1-800-647-8733)
School Participation Division Contact Information
If you are unsure if a compliance concern should be reported to the OIG or if they have specific questions regarding the proper administration of Title IV programs, please contact your regional School Participation Division for guidance.
