On October 19, 2026, the Treasury announced that FinCEN has identified approximately $270 million in suspicious financial activity potentially linked to fraud against federal student aid programs. According to the Treasury, FinCEN has referred these findings to federal investigators to pursue potential fraud schemes targeting federal student aid programs and help ensure those responsible are held accountable.
Federal student aid fraud schemes include “ghost students,” where criminals use stolen personal information or synthetic identities to enroll fake students and obtain financial aid, and “straw students,” where real people are recruited to enroll while fraudsters keep their aid refunds. These schemes may involve corrupt school employees and often occur without victims’ knowledge. Student aid fraud wastes taxpayer funds and can prevent legitimate students from accessing classes.
In July 2026, FinCEN issued an Alert to warn financial institutions about student aid fraud and asked them to report suspicious activity. Financial institutions have filed nearly 100 suspicious activity reports since the July Alert, identifying more than 20,000 potentially suspicious transactions since February 2026. FinCEN has referred this information to law enforcement for further investigation, noting that the reports may not reflect the full extent of suspicious activity.
Read the Treasury’s announcement here.