The U.S. Department of the Treasury announced today that its Financial Crimes Enforcement Network (FinCEN) has identified approximately $270 million in suspicious financial activity potentially linked to fraud against federal student aid programs, and has referred its findings to federal investigators.

According to Treasury, financial institutions have filed nearly 100 suspicious activity reports since a July alert warned about student aid fraud, with more than 20,000 potentially suspicious transactions identified since February alone.

Officials say the schemes often involve fraudulent enrollments designed to divert financial assistance away from legitimate students. In “ghost student” schemes, criminals steal personal information, including names and Social Security numbers, and use it to enroll fake students in classes under a victim’s identity. Fraudsters can also use artificial intelligence to produce fake documents that blend stolen information with invented details, creating synthetic identities that pass identity checks. Victims, including minors, often have no idea someone received student aid in their name.

In “straw student” schemes, fraud rings pay real people for their personal information, enroll them at a school, and then keep the aid refunds issued to them, sometimes with the help of corrupt school employees.

“Federal student aid is intended to expand educational opportunities, not line the pockets of fraudsters who steal from students pursuing their education and hardworking taxpayers,” Treasury Secretary Scott Bessent said in a statement.

With thousands of Lakewood-area students and families filling out FAFSA applications and relying on Pell Grants and federal student loans each year, it is worth taking a few minutes to make sure nobody has used your identity, or your child’s.

Log in to your Federal Student Aid account at StudentAid.gov and check for any schools, enrollments, or aid you do not recognize. Check your credit report, and your child’s, for student loans you never took out; a minor should generally have no credit file at all. Guard Social Security numbers carefully, especially children’s, since the theft can go unnoticed for years. And if you discover aid taken out in your name, report it at IdentityTheft.gov and contact the school’s financial aid office right away.

Treasury says student aid fraud drains finite grant resources from deserving students, can keep real students out of classes filled by fake enrollees, and can leave identity theft victims responsible for debts they never incurred.