What Are Ghost Students? Financial Aid Fraud Explained

Across the country, colleges are discovering that their enrollment rolls are full of students who don’t actually exist. They’re called “ghost students”—fabricated or stolen identities used by scammers to enroll in college courses, trigger federal financial aid disbursements, and then vanish with the money.The fraud has grown so large that the U.S. Department of Education says it prevented more than $1 billion in attempted student aid theft in 2025 alone. And the problem is getting worse.

The U.S. Department of Education announced Thursday that it will move out of its longtime headquarters in Washington, D.C., downsizing to a smaller building. The agency will relocate to a smaller federal office one block away, a move that underscores how much the department has shrunk under the Trump administration’s push to dismantle it.The LBJ building, which sits at 400 Maryland Avenue SW, is now approximately 70% vacant following a reduction in force that cut nearly half of the department’s workforce.The move is targeted for August 2026.

The Department of Education is going to begin contacting the more than 7 million borrowers enrolled in the now-defunct SAVE student loan repayment plan, directing them to choose a new repayment plan. The first emails are reminders, followed by formal notices.Starting July 1, loan servicers will issue formal 90-day notices requiring borrowers to switch or be automatically placed on the standard repayment plan. That means the effective end date of the SAVE forbearance will likely be September 30, 2026.The Washington Post first reported that the Education Department would begin emailing SAVE borrowers on Friday to encourage them to apply for a different repayment plan. Those emails will be followed by formal notices from loan servicers giving borrowers 90 days to choose a new plan or be automatically moved into the standard repayment plan — the most expensive option available, according to three people familiar with the matter.The Associated Press confirmed the timeline, reporting that the formal 90-day notices from loan servicers will begin on July 1. Borrowers will be contacted in waves, with a new group receiving notice every two weeks. Those enrolled in SAVE the longest will be the first to hear from their servicers.This aligns with The College Investor's previous SAVE Timeline Predictions of fall 2026.

College applications present students with a challenging and time-consuming project — perhaps the largest they have faced in their lives. As a parent, you can help your child manage the process, but you can also hurt their chances if you make the wrong moves.Here’s a collection of college admissions secrets that can help you craft the ideal college list, get your child into schools they love, and choose one that you’ll be able to afford.

The main difference between a prepaid tuition plan and 529 plan is that prepaid tuition plans allow you to lock in tuition credits at today's prices.Prepaid tuition plans and 529 college savings plans are specialized savings accounts used for future college costs. Prepaid tuition plans act like defined benefit plans, while 529 plans act like defined contribution plans.There are other significant similarities and differences between them. Get the details for each to figure out which plan makes more sense for your college needs.

A federal appeals court heard arguments on Friday over whether the Education Department can further delay a court-approved settlement that promises loan discharges, payment refunds, and credit report corrections to more than 200,000 student loan borrowers who say they were defrauded by their colleges.The case, Sweet v. McMahon, has been working through the courts since 2019 (as a result, the case has changed names a few times: Sweet v. DeVos and Sweet v. Cardona). The settlement, valued at up to $12 billion, set firm deadlines for the Department to process borrower defense to repayment applications. The Department has missed those deadlines and asked for extensions multiple times. So far, those requests have been denied.During Friday’s hearing before the Ninth Circuit Court of Appeals, Judge Kim McLane Wardlaw offered a blunt assessment: “The time for negotiating is over. You missed your deadline.”The court is now considering the Department’s motion to stay the settlement while it appeals.

The Department of Education and the U.S. Treasury Department announced a new interagency agreement on March 19, 2026, that will shift operational control of defaulted federal student loan collections from Education to Treasury. This comes as nearly 7.7 million student loan borrowers holding $180 billion in student loans are in default.The move, which the administration has branded the “Federal Student Assistance Partnership,” marks a big step forward in dismantling the Education Department in what officials described as the equivalent of the “fifth-largest commercial bank in the United States.”Under the agreement, Treasury will immediately take over collecting on defaulted student loan debt, using private collection agencies to help borrowers in default enroll in rehabilitation programs or return to good standing. Treasury will also absorb the operations of FSA’s Default Resolution Group, which manages the Default Management and Collections System (DMCS). In future phases, Treasury would expand to managing non-defaulted loans and potentially other FSA functions, including FAFSA administration.It's important to realize that Treasury already played a large role in collections, but this is now administrative control of the bigger program.

Hundreds of thousands of college students are enrolled in degree and certificate programs that, under new federal law, may soon be cut off from federal student loans. The One Big Beautiful Bill Act, requires colleges to prove their programs actually improve graduates’ earning power, and those that don't risk losing access to federal student loan programs.The framework, informally called “Do No Harm,” sets a new standard: if a program’s graduates earn less than comparable workers who never attended college at all, the program can no longer receive federal loan funding.The Department of Education has already released preliminary data on nearly 50,000 programs, and the results reveal a clear pattern of which fields are at risk — including some where a college credential is legally required to work in the profession at all.Remember: It's not just about the degree (like B.S. Business). It's about the program and school (such as University of Vermont, Bachelor's of Science in Plant Sciences). It's individual programs and degrees granted by individual colleges that are at risk.

Federal Student Aid released its latest quarterly data update, and the numbers paint a stark picture: 7.7 million borrowers with $180 billion in outstanding federal student loans are now in default as of December 2025.The quarter ending in December marked the first time many borrower accounts could the threshold for default following the end of the pandemic-era payment pause and the subsequent on-ramp protection period.While the number is large, FSA noted that it mirrors the default count from December 2019, when 7.7 million recipients with approximately $168 billion in federal student loans were in default. The $12 billion increase in default balances reflects the growth in the overall portfolio during the intervening years.However, the Department of Education has still continued to pause some collections efforts in light of all the major student loan changes happening.

The tax deadline is almost here! Here are some last minute tax reminders if you're still working on filing your taxes.Although it might not be the most enjoyable financial task, it's a necessary obligation that we each undertake every year. And if you use great tax software, filing taxes doesn’t take as much time as you may dread.But tax filing time isn’t only about filing returns. There are things you can do today to help you save money on your tax bill, and help you save time on filing.Here are the best last-minute tax tips to consider this season.