Letter emphasizes AFC’s support for S. 4428, the No Aid for Ghost Students Act of 2026, to safeguard educational resources for legitimate borrowers and institutions

Washington, D.C. (July 30, 2026) – The American Fintech Council (AFC), the largest industry association representing both responsible fintech companies and innovative banks, submitted a letter to the Senate Committee on Health, Education, Labor, and Pensions (HELP) expressing strong support for S. 4428, the No Aid for Ghost Students Act of 2026. This bipartisan legislation would require the Department of Education to implement identity fraud detection systems when reviewing Free Applications for Federal Student Aid (FAFSA) submissions and halt disbursements to flagged applicants until their identities can be verified.

“This pragmatic legislation strikes a balance between ensuring eligible students retain access to financial assistance and stopping bad actors seeking to defraud students,” said Phil Goldfeder, CEO of the American Fintech Council. “By establishing consistent detection, verification, and oversight requirements, Congress can protect taxpayers and educational institutions while ensuring federal funds reach the students who need them to pursue higher education.”

Introduced by Senators Moody, Hassan, and Tuberville, S. 4428 establishes consistent detection, verification, reporting, auditing, and oversight requirements to identify suspicious applications to make sure federal funds are not improperly distributed. AFC notes that the House of Representatives has already passed companion legislation, H.R. 7892, and urges the Senate HELP Committee to report S. 4428 favorably and pass the bill without delay.

“As identity fraud schemes grow increasingly sophisticated, traditional verification systems simply cannot keep pace with the bad actors seeking to exploit the student aid pipeline,” said Ian P. Moloney, Chief Policy Officer at the American Fintech Council. “Fraudulent applicants employing fabricated or stolen identities divert limited federal resources, impose substantial administrative and financial burdens on institutions of higher education, and undermine confidence in programs that enable millions of Americans to pursue educational and economic opportunity.”

AFC has long advocated for pragmatic reforms to the Federal Student Aid program, including calling on the Office of Federal Student Aid in October 2024 to remedy technological issues impacting data access for loan servicers. While technical challenges persist, AFC emphasizes the critical need for legislative solutions to address sophisticated identity fraud and offers to serve as a resource for lawmakers on responsible identity verification practices.

A standards-based organization, the American Fintech Council (AFC) is the largest and most diverse trade association representing financial technology (fintech) companies and innovative banks. On behalf of over 150 member companies and partners, AFC promotes a transparent, inclusive, and customer-centric financial system by supporting responsible innovation in financial services and encouraging sound public policy. AFC members foster competition in consumer finance and pioneer products to better serve underserved consumer segments and geographies.

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