By Gloria Ogbonna
U.S. Education Secretary Linda McMahon has called on Minnesota Governor Tim Walz (D) to resign following reports of extensive fraud within the state’s college and university financial aid system.
In a sharply worded letter sent to Walz on Monday, McMahon accused the governor of failing to provide adequate oversight during his tenure, arguing that his leadership allowed large-scale abuse of taxpayer-funded education programs to flourish.
McMahon noted that Walz has served as Minnesota’s governor since 2019 and asserted that, during that period, what she described as a “careless lack of oversight” contributed to systemic vulnerabilities in the state’s education and welfare infrastructure.
According to the letter, those weaknesses allegedly attracted organized fraud schemes, including actors operating from outside the United States. McMahon specifically cited concerns about coordinated fraud rings exploiting federal student aid programs through Minnesota-based colleges.
Central to McMahon’s criticism was the discovery of what she described as 1,834 “ghost students” who were found to have collectively received approximately $12.5 million in taxpayer-funded grants and student loans.
These individuals, she said, were either not properly identity-verified, did not reside in the United States, or in some cases did not exist at all. Despite this, they were allegedly able to access federal financial aid intended to help legitimate students afford higher education.
Egregious fraud in Minnesota has cost taxpayers hundreds of millions of dollars, including funds sent to Somalia through money services businesses (MSBs), which provide financial services outside a formal bank.
Under @POTUS’ leadership, the @USTreasury will not stop until we…
— Treasury Secretary Scott Bessent (@SecScottBessent) December 12, 2025
In her letter, McMahon argued that the scale of the fraud reflected a serious failure of leadership at the state level. She said that, given what she characterized as Walz’s “dereliction of the office entrusted” to him, she was urging him to step aside “and make way for more capable leadership.” McMahon framed the issue as not only a financial scandal but also a betrayal of public trust, emphasizing that the stolen funds were meant to support young Americans seeking college degrees.
“At the beginning of this year, the U.S. Department of Education became aware that fraudulent college applicants, especially concentrated in Minnesota, were gaming the federal postsecondary education system,” McMahon wrote. She said the schemes were designed to siphon off federal money while bypassing safeguards meant to ensure aid goes to eligible students.
Expanding on how the alleged fraud operated, McMahon explained that the so-called ghost students would enroll on paper, collect federal checks, share a small portion of the funds with cooperating colleges, and then keep the remainder without ever attending classes. She said this pattern underscored the need for stronger controls and accountability mechanisms.
McMahon also highlighted steps her department has taken in response, including enhanced fraud prevention measures such as mandatory identity verification for certain first-time student aid applicants.
According to her, these efforts have already blocked more than $1 billion in attempted financial aid theft, including schemes involving coordinated international fraud rings and artificial intelligence bots posing as students.
In a controversial passage of the letter, McMahon also criticized Rep. Ilhan Omar (D-MN), suggesting that her public support for broad student debt cancellation represents another example of misuse of taxpayer resources.
McMahon claimed that Omar has acknowledged she would personally benefit from such policies, having borrowed tens of thousands of dollars for her education, and argued that student loans should be repaid rather than forgiven.
As McMahon’s call for Walz’s resignation gained attention, public reaction followed. A petition on Change.org has reportedly gathered roughly 4,491 signatures calling for the resignations of not only Walz, but also Lt. Gov. Peggy Flanagan, Minnesota Attorney General Keith Ellison, and Secretary of State Steve Simon.
The petition argues that Minnesota needs new leadership capable of restoring public confidence and rebuilding trust between the government and its constituents.
The controversy has also drawn in other federal agencies. Treasury Secretary Scott Bessent announced that the Treasury Department plans to issue a Geographic Targeting Order that would impose enhanced reporting requirements on certain Money Services Businesses.
The move comes amid reports suggesting that some Minnesota taxpayer funds may have been diverted overseas, with allegations involving potential links to the terrorist organization Al-Shabaab through elements of the Somali community in the state.
Bessent said the order would require rapid reporting of suspicious activity to the Financial Crimes Enforcement Network, allowing law enforcement agencies to act more quickly. In a post on X, he described the measure as an important tool to combat illicit financial flows and protect public funds.
Separately, the Department of Labor has announced that it will review Minnesota’s Unemployment Insurance program following reports of a broader fraud ring targeting the state’s welfare system.
Together, the investigations and public statements have placed Minnesota’s leadership under intense scrutiny, as questions mount over oversight, accountability, and the safeguarding of taxpayer resources.
Source Breitbrat
Original article
Comments