WASHINGTON, D.C. (WFRV) – The U.S. Senate has unanimously passed a piece of bipartisan legislation that is intended to enhance efforts to identify and shut down student debt relief scams.
Senator Tammy Baldwin (D-WI) introduced the Stop Student Debt Relief Scams Act in April 2019 with Senators Mike Braun (R-IN), Jeanne Shaheen (D-NH) and Deb Fischer (R-NE).
The legislation now awaits approval from the U.S. House of Representatives before heading to the President’s desk to be signed into law.
“Far too many students are already struggling with student loan debt, and they deserve to be protected from scammers and bad actors who are preying on their financial security,” says Senator Baldwin. “The additional repayment relief provided to many borrowers during the COVID-19 pandemic has unfortunately also created additional opportunities for fraudsters to do more harm. I’m so proud that my bipartisan reform has unanimously passed the Senate because it is just commonsense to stop these student loan debt relief scams that harm hardworking Americans and prevent them from getting ahead.”
According to a release from Sen. Baldwin’s office, Americans face more than $1.7 trillion in student loan debt.
Debt relief scams falsely promise borrowers a quick fix with little hassle. These scams will robocall student loan borrowers until they agree to pay thousands of dollars in unnecessary fees for services that are available for free, claiming to reduce or forgive borrowers’ student debt.
“In a March 2018 report, the U.S. Department of Education’s Office of Inspector General recommended that Congress strengthen federal law to help stop scam artists that fraudulently obtain access to borrower’s online login credentials, primarily by imposing meaningful financial penalties and prosecuting individuals and entities perpetrating these scams. The Stop Student Debt Relief Scams Act would accelerate the end of this misconduct,” the release reads.
The Stop Student Debt Relief Scams Act will enhance law enforcement and administrative abilities to identify and shut down student debt relief scams. Specifically, the legislation will:
- Clarify that it is a federal crime to access U.S. Department of Education information technology systems for fraud, commercial advantage, or private financial gain, and impose fines on scammers for violations of the law;
- Direct the U.S. Department of Education to create a new form of third-party access, akin to the current “preparer” function on the Free Application for Student Aid (FAFSA) for those applying on behalf of a student and their family, in order to protect legitimate organizations;
- Require the U.S. Department of Education to maintain common-sense reporting, detection, and prevention activities to stop potential or known debt relief scams; and
- Require student loan exit counseling to warn federal loan borrowers about debt relief scams.
The full bill text is available here: