President Biden’s plan to unilaterally forgive $430 billion in student loan debt, which was blocked earlier this year by the Supreme Court, fails to protect against potential fraud, a new government report released Thursday shows.
Biden’s Education Department sought to approve between $10,000 and $20,000 in student loan relief for up to 31 million borrowers as part of the plan — but did not properly check whether those students’ income required debt forgiveness, according to the Government Accountability Office.
“Fraud poses a major threat to the integrity of federal programs and erodes public trust in government,” the watchdog said.
“We have previously reported that the public health crisis, economic instability and increased federal funding flows associated with the COVID-19 pandemic have expanded opportunities for fraud.”
More than 26 million students had applied for or were automatically deemed eligible for debt relief by November 2022, when a lower court order halted the program.
President Biden’s plan to unilaterally forgive $430 billion in student loans fails to protect against fraud, a new government report released Thursday shows.REUTERS The Supreme Court struck down the student loan cancellation program in June.AFP via Getty Images
The report showed the Department of Education approved more than 12 million applicant requests without ever “collecting or reviewing any income documentation” from borrowers.
Instead, the agency relies on self-reported income and applicant data on post-registration income and aggregate income to estimate eligibility.
Under the program, federal Pell Grant recipients are eligible for up to $20,000 in debt relief.
The report showed the Department of Education approved more than 12 million applicant requests without ever “collecting or reviewing any income documentation” from borrowers.GAO
Recipients without a Pell Grant are eligible for up to $10,000 in student loan forgiveness if their adjusted gross income in 2020 or 2021 is below $125,000 for individuals and below $250,000 for married couples filing jointly.
Another 2 million borrowers are automatically eligible for debt cancellation based on the income they reported in past financial aid applications and enrollment in a loan repayment plan.
“Education and the GAO have identified previous problems with people underreporting their income on these forms, but the department took no steps to verify income for these borrowers before automatically approving them for discharge,” highlights from the report state. .
More than 26 million students had applied for or were automatically considered eligible for debt relief by November 2022, when a court order halted the program.GAO
The final step will review tax filings from select borrowers, only 790,000 of whom had been flagged — but not had their incomes rechecked — at the time the Supreme Court struck down the program.
The GAO asked Biden’s Department of Education “to include a fraud risk management assessment before awarding aid, implement all levels of its fraud risk management and implement controls to avoid relying on self-reported data,” to which agency officials “partially agree.”
“It is unconscionable that the Biden administration is willing to shift hundreds of billions of dollars in student debt to taxpayers without accountability,” Senate Health, Education, Labor and Pensions Committee ranking member Bill Cassidy (R-La.) said in a statement. .
The final step would be to review tax filings from select borrowers, only 790,000 of whom had been flagged — but not having their income reviewed — at the time of the Supreme Court’s decision.GAO
“Americans who don’t go to college or pay off their loans shouldn’t be stuck footing the bill for those who go to college to make more money after graduation.”
In a letter the following Thursday, Cassidy and Sen. Rand Paul (R-Ky.) called out Education Secretary Miguel Cardona for withholding some information from the public version of the report.
“During his review of the public release version of this report, [the Education Department] apply [Controlled Unclassified Information] designations to entire sentences, and, in one case, entire footnotes,” the GOP senator wrote.
In a letter Thursday, Cassidy and Sen. Rand Paul (R-Ky.) called out Education Secretary Miguel Cardona for also withholding some information from the public version of the report.REUTERS
“GAO made changes to its report to address [the department]concern. Our staff reviewed the unamended version of the GAO report and was unable to determine a reasonable justification for the CUI ED classification,” they added.
“This raises serious questions about the review process ED follows when examining GAO reports. It also raises concerns that ED may use the CUI designation to purge embarrassing or otherwise unfavorable information in GAO reports and protect them from public release.”
Biden and Cardona announced a student loan cancellation program in August 2022, arguing that a law passed during the Iraq War to provide loan relief to military service members should be able to cover students affected by the COVID-19 pandemic.
Solicitor General Elizabeth Prelogar argued before the Supreme Court in January that debt cancellation would “fall comfortably” under the Higher Education Assistance Opportunity for Students (HEROES) Act of 2003 and that the president had “clear authority” to do so.
But on the final day of his final term, the high court’s six conservative justices ruled that the law was enacted only to help Iraq and Afghanistan war veterans and that Biden could not “rewrite the law from the ground up” without Congressional approval.
The following month, Biden and Cardona unveiled a separate income-based repayment plan for student loans that would cost $475 billion over the next decade, according to the Penn Wharton Budget Model.
A Department of Education spokesperson emphasized to The Post the importance of the GAO study as well as the agency’s commitment to reducing the risk of fraud. The representative added that department officials are reviewing letters from Cassidy and Paul.
The White House did not respond to a request for comment.
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Source: thtrangdai.edu.vn/en/
