On Tuesday, The Federalist posted an article about another scandal in Minnesota involving government funds.

The article reports:

In Minnesota, home to the largest population of Somali immigrants in the U.S. and the site of numerous fraud investigations, fraudsters received $12.5 million in student loan and education grant money, according to a letter Education Secretary Linda McMahon sent to Minnesota Gov. Tim Walz.

The letter calls on Walz to resign, and states that a new fraud prevention system at the department has found over $1 billion in “attempted financial aid theft,” including by international fraud rings and artificial intelligence (AI) bots.

“[Y]our careless lack of oversight and abuse of the welfare system has attracted fraudsters from around the world, especially from Somalia, to establish a beachhead of criminality in our country,” McMahon wrote. “As President Trump put it, you have turned Minnesota into a ‘fraudulent hub of money laundering activity.’”

It is disturbing to me that international bad actors are taking advantage of the lack of accountability in spending American taxpayer money.

The article concludes:

In June, the Department of Education announced a “nationwide effort to eliminate identity theft and fraud in the federal student aid programs for the fall 2025 semester,” and a requirement for institutions of higher education to verify “certain first-time applicants who are enrolled in the summer term,” as an immediate effort to combat fraud.

“Federal Student Aid (FSA) data indicates that the rate of fraud through stolen identities, particularly involving technologically advanced fraud rings, has reached a level that imperils the federal student assistance programs,” the department stated at the time.

Another obvious safeguard, also announced by the Education Department in June, required first-time student aid applicants to “present, either in person or on a live video conference, an unexpired, valid, government-issued photo identification to an institutionally authorized individual and the institution must preserve a copy of this documentation.”

As the department has noted, the Biden administration removed verification capabilities for student loans and “diverted resources from fraud prevention toward its illegal loan forgiveness efforts,” opening the door for massive fraud.

I think it is time to turn the student loan program back to the states and back to private banks. I suspect that will end a lot of the fraud. Private business will always do a better job than the government. Note that it is the people from private industry put in place by President Trump that are finding the fraud.