FAFSA Real-Time Fraud Detection Launching April 26 with a set of New Comment and Reject Codes

The U.S. Department of Education continues to ramp up efforts to combat widespread financial aid fraud by introducing real-time fraud detection within FAFSA processing. This latest update represents a major shift from post-processing flags to immediate identification of suspicious applications, allowing institutions to intervene earlier and prevent improper disbursements.

Starting on April 26, 2026, the Department will implement a real-time identity fraud detection capability within the FAFSA form. Applicants will be placed into one of four risk categories at the end of the real-time screening. The Department will continue to generate ISIRs for all applicants’ selected schools and state agencies and a new comment code will identify the type of risk detected.

• Low Risk 
  • Applicants in this category will not be required to provide additional identity information, will not have their application rejected due to fraud risk, and will not receive a Comment Code.
• Moderate Risk 
  • Applicants in this category will not be required to provide additional identity information and will not have their application rejected due to fraud risk.
  • Comment Code 353 will be added to the ISIR to inform schools that the application contained elements that raised some risk concerns, but did not reach the level of requiring identity verification.
  • This Comment Code is provided for greater transparency on fraud risk and to support school-selected verification decisions. While institutions will not be required to take any action, schools are encouraged to conduct their own verification activities, such as in-person identity verification.
• High-Risk 
  • Applicants in this category will be required to complete an additional identity confirmation process with the Department as part of the online FAFSA process.
    • If attempted identity confirmation is completed but unsuccessful, the FAFSA form will be processed with Reject Code 74 and Comment Code 354.
    • If attempted identity confirmation is not completed, the FAFSA form will be processed with Reject Code 74 and Comment Code 355.
    • If attempted identity confirmation is successfully completed, the FAFSA form will be processed with Comment Code 356, which indicates that the applicant confirmed their identity.
• Highest Risk
  • Applicants in this category will not be presented with the option to complete identity confirmation during the online FAFSA process and will have their FAFSA form processed with Reject Code 75 and Comment Code 357.
• Technical Issue – Can’t Detect Risk
  • In addition to the scenarios listed above, the Department is adding Comment Code 360, which will display on ISIRs when a technical issue prevents the Department from completing normal screening on an applicant’s FAFSA form. The Department does not anticipate using this code often but, because they intend to screen every application. However, the Department will use this code to alert schools when screening is not available.

How Identity Confirmation on the FAFSA Form Works

Applicants placed in the high-risk category by the Department during the online FAFSA process will be asked to confirm their identity by presenting a valid government-issued id and completing a brief, live camera check. This step must be completed on a mobile or tablet device with a camera.

Applicants who fail to provide documentation during the timeframe can still submit their FAFSA form, but it will be processed with Reject Code 74 and Comment Code 355. These applicants must contact their school’s financial aid office to complete the identity verification confirmation process following the procedures described below.

Resolving Identity Confirmation Reject Codes

Any application that is rejected under the new identify confirmation process has a high risk of being fraudulent. Although a small number of legitimate students are likely to be flagged for in-person verification by institutions, the Department’s expectation is that FAAs will not need to take any action on the significant majority of rejected applications.

Starting on May 3, 2026, schools will be able to assist applicants in resolving their application’s rejected status. To complete the process, FAAs must follow the guidelines for information to be verified and acceptable documentation for resolving identity verification (similar to the V4 Verification Tracking Group), as published in the Nov. 26, 2025 Federal Register notice.

If an FAA successfully confirms the identity of a student whose application was rejected, the FAA must resolve the reject code by reporting the result of the identity confirmation using the new field “FAA Fraud Override” in the FAFSA Partner Portal. Once the FAA updates the “FAA Fraud Override” field, the FAFSA Processing System will generate a new transaction—assuming there are no other issues on the application— with a valid ISIR that contains a Student Aid Index and Pell Grant eligibility. New Comment Code 358 will also be added to indicate that an FAA successfully resolved the reject status after confirming the applicant’s identity. This new transaction will be sent to all schools and state agencies listed on the ISIR. Schools may use the identity confirmation performed by another institution if they have no reason to suspect fraud or conflicting information.

At this time, the fraud override indicator must be submitted through FAFSA Partner Portal. The Department is working to enable corrections via the Electronic Data Exchange and will update this announcement when that functionality is available.

The “FAA Fraud Override” is separate from the process for resolving ISIRs with a selected Verification Tracking Group of V4 or V5. In the rare situation where an application has been rejected for suspected fraud and selected for V4/V5, the FAA only needs to complete a single identity confirmation. The results should then be reported in both the identity verification section of FPP and in the new “FAA Fraud Override” field. As the Department is working to reduce V4 and V5 selection to minimal levels, we expect this scenario to be exceedingly rare.

FAAs are not required to take action on ISIRs with any of the new fraud-related reject or comment codes if the student is not enrolled, the student will not be a federal student aid recipient, or the student is otherwise ineligible to receive Title IV funding.

One-Time Fraud Detection Screening for Previously Submitted Forms

The Department will screen all previously submitted 2026–27 FAFSA forms now that this new technology is in place. This evaluation will be based on data already provided on the form and no additional interaction is required by applicants or contributors. If fraud risk is identified on previously submitted forms, the evaluation will likely result in additional ISIRs selected for V5 verification.

List of Comment and Reject Codes

The FAFSA Specifications Guide has been updated with new reject and comment codes.

For more information, view the official announcement here: (APP-26-03) FAFSA Real-Time Fraud Detection