Student Loan Fraud Screening, Verification Bill Passed by House

The House passed legislation Wednesday to require the Education Department to screen financial aid applications for identity fraud.

The measure (H.R. 7892), which was passed 249-172, also would require the department to notify an applicant and each school designated on an application if there’s a reasonable suspicion of identity fraud.

Under the bill, schools would be required to conduct additional identification verification, with the option to use a third-party provider, and would be barred for disbursing aid to students unless their identify is confirmed.

The Education Department implemented an identity fraud detection system in April with some similar ...