(APP-26-03) FAFSA Real-Time Fraud Detection

As discussed in Electronic Announcement APP-25-16 and Electronic Announcement GENERAL-25-36, the U.S. Department of Education (Department) is implementing new measures to prevent fraud on the Free Application for Federal Student Aid (FAFSA^®) form. This effort is driven by the need to respond to the significant scale of recent fraud activity and by constructive feedback from financial aid administrators (FAAs) who have played a key role in the Department’s recent verification efforts.

Starting on April 26, 2026, the Department will implement a real-time identity fraud detection capability within the FAFSA form. In partnership with a leading financial services firm, the Department will screen and assess risk as students and families complete the form – creating an automated, streamlined process that occurs in real-time. This approach will allow legitimate students to proceed through the FAFSA process quickly, while requiring a small portion of applicants to complete additional steps to confirm their identity as part of the online FAFSA submission process.

The Department will continue to generate Institutional Student Information Records (ISIRs) for all applicants’ selected schools and state agencies. The additional identity verification measures will not impact the generation of ISIRs. However, if the Department is unable to confirm an applicant’s identity within the online FAFSA workflow, the resulting ISIR will be placed in a rejected status. ISIRs that are rejected—due to an applicant being unable or unwilling to complete the online identity confirmation process—will include new Comment Codes and text as noted below. Given that the Department suspects the vast majority of rejected applications to be fraudulent, we anticipate that there will only be a small number of applications that would need to undergo additional screening by an institution via in-person verification by institutions.

Applicants will be placed into one of four risk categories at the end of the real-time screening:

Applicants placed in the high-risk category by the Department during the online FAFSA process will be asked to confirm their identity by presenting documentation and completing a brief, live camera check. This step must be completed on a mobile or tablet device with a camera. Applicants who begin the FAFSA form on a desktop or other non-mobile device will be provided with a QR code to continue the process on a mobile device. They may use any mobile device for this step and will not need to log in or reenter information they provided on their FAFSA form.

Applicants will be asked to present one valid form of government-issued identification, such as a driver’s license, passport, tribal identification card, or permanent resident card, and to come on camera to take a picture. This process is automated and will happen in real time, including feedback to the applicant if their identity documentation or camera image is not legible so they can correct the issue. If the required document is not immediately available, applicants will have a short window to retrieve it if it is nearby; however, the session is designed to be completed in one sitting and cannot be paused or resumed later.

Applicants who fail to provide documentation during the timeframe can still submit their FAFSA form, but it will be processed with Reject Code 74 and Comment Code 355. These applicants must contact their school’s financial aid office to complete the identity verification confirmation process following the procedures described below. As a reminder, any applicant selected for this process has already been identified as being at high-risk for identity fraud.

The Department reiterates that any application that is rejected under this new identify confirmation process has a high risk of being fraudulent. Although a small number of legitimate students are likely to be flagged for in-person verification by institutions, the Department’s expectation is that FAAs will not need to take any action on the significant majority of rejected applications.

That said, in cases where a legitimate student is impacted, starting on May 3, 2026, schools will be able to assist applicants in resolving their application’s rejected status. To complete the process, FAAs must follow the guidelines for information to be verified and acceptable documentation for resolving identity verification (similar to the V4 Verification Tracking Group), as published in the Nov. 26, 2025 Federal Register notice.

If an FAA successfully confirms the identity of a student whose application was rejected, the FAA must resolve the reject code by reporting the result of the identity confirmation using the new field “FAA Fraud Override” in the FAFSA Partner Portal (FPP). Once the FAA updates the “FAA Fraud Override” field, the FAFSA Processing System will generate a new transaction—assuming there are no other issues on the application— with a valid ISIR that contains a Student Aid Index and Pell Grant eligibility. New Comment Code 358 will also be added to indicate that an FAA successfully resolved the reject status after confirming the applicant’s identity. This new transaction will be sent to all schools and state agencies listed on the ISIR. Schools may use the identity confirmation performed by another institution if they have no reason to suspect fraud or conflicting information.

At this time, the fraud override indicator must be submitted through FPP. The Department is working to enable corrections via the Electronic Data Exchange and will update this announcement when that functionality is available.

The “FAA Fraud Override” is separate from the process for resolving ISIRs with a selected Verification Tracking Group of V4 or V5. In the rare situation where an application has been rejected for suspected fraud and selected for V4/V5, the FAA only needs to complete a single identity confirmation. The results should then be reported in both the identity verification section of FPP and in the new “FAA Fraud Override” field. As the Department is working to reduce V4 and V5 selection to minimal levels, we expect this scenario to be exceedingly rare.

FAAs are not required to take action on ISIRs with any of the new fraud-related reject or comment codes if the student is not enrolled, the student will not be a federal student aid recipient, or the student is otherwise ineligible to receive Title IV funding.

Finally, the Department will screen all previously submitted 2026–27 FAFSA forms now that this new technology is in place. This evaluation will be based on data already provided on the form; no additional interaction is required by applicants or contributors. Since this evaluation will occur after the application is submitted and the applicant will be unable to complete real-time identity confirmation, the evaluation will likely result in additional transactions selected for V5 verification where fraud risk is identified. This will be a one-time review of applications submitted before real-time fraud detection was implemented.

The following table lists relevant scenarios and their potential outcomes. The FAFSA Specifications Guide has been updated with new reject and comment codes. In addition to the scenarios listed above, the Department is adding Comment Code 360, which will display on ISIRs when a technical issue prevents the Department from completing normal screening on an applicant’s FAFSA form. We do not anticipate using this code often but, because the Department intends to screen every application, it is important for us to alert schools when screening is not available.