Oakland Press: Congresswoman Stevens introduces legislation to stop student loan scams

 In News & Updates

U.S. Rep. Haley Stevens of Michigan’s 11th District and U.S. Rep. Lloyd Smucker of Pennsylvania have introduced legislation to give the U.S. Department of Education and law enforcement agencies the tools needed to identify and shut down student debt relief scams.

The bipartisan Stop Student Debt Relief Scams Act also provides student loan exit counseling to inform federal loan borrowers about debt relief scams.

These schemes robocall student loan borrowers until they agree to pay unnecessary and exorbitant fees for services that are often already available for free, according to a statement from Stevens’ office.

The victims of these schemes are not only defrauded, but also unknowingly become delinquent on their payments and default on their loans, falling deeper into debt.

“Millions of Americans are working hard to pay off their student loan debt, and they deserve to be protected from scammers who want to take advantage of them for financial gain,” said Stevens.

“I am proud to introduce the Stop Student Debt Relief Scams Act, because we have to stop these scammers from jeopardizing the financial future of student borrowers. It’s time to give law enforcement, the Department of Education, and borrowers themselves the tools they need to put an end to these scams,” the Democratic lawmaker said.

Specifically, HR 2888 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

Require student loan exit counseling to warn federal loan borrowers about debt relief scams. The bill is endorsed by the Education Finance Council, National Council of Higher Education Resources, Student Loan Servicing Alliance, National Consumer Law Center (on behalf of its low-income clients), Young Invincibles and the Institute for College Access and Success.

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