House Republicans are demanding answers from Education Secretary Miguel Cardona over the potential for waste and fraud in President Biden’s student loan repayment plan.
On Friday, House Oversight Committee Chairman Rep. James Comer (R–KY) and House Education and Workforce Committee Chairwoman Virginia Foxx (R–NC) sent a letter to Cardona asking how the department planned to deter potential fraud since it was pursuing an income–based repayment plan without verification measures in place for income.
“In light of the Oversight Committee’s observations about self–certification in multiple COVID–19 pandemic relief programs, we are concerned about the extent to which the Department is leaving taxpayers vulnerable to waste, fraud, and abuse,” they wrote in the letter.
The Republicans are concerned because the income is self–verified, potentially exposing the program to abuse. The Democrats’ plan stipulates lower monthly payments for those with lower incomes.
“The Biden Administration’s student loan bailout scheme leaves taxpayers holding the bag,” Comer said. “Biden’s Department of Education has now kicked the door wide open to waste, fraud, and abuse by eliminating verification measures designed to prevent fraud in student loan repayments. We need Secretary Cardona to provide answers about why the Department is taking actions that make hardworking taxpayers liable when student loan borrowers misrepresent their income.”
Foxx added that the department’s decision to not enforce program requirements called into question the department’s overall preparedness to handle the return to repayment for millions of borrowers.
“When borrowers initially enrolled in an [income–driven repayment] plan, they provided tax return information,” she said. “It’s ridiculous for the Department to not enforce the program requirements.”
The letter comes as the department is getting ready to resume student loan payments, something that has been paused for three years. Cardona told senators during a hearing on Thursday that some payments could be impacted by how the Supreme Court decides to rule on Biden’s student debt cancellation plan, which would unilaterally cancel up to $20,000 in unpaid loans for 40 million borrowers.
“We recognize that during the pandemic, it was very difficult for borrowers,” Cardona said. “We are committed to making sure that once a decision is made, that we’re going to resume payments 60 days after, but no later than June 30. We’re going to begin that process.”
Republicans are now calling on Cardona to explain how the department plans to deter potential fraud in the loan repayment plan.
“Alarm bells should be ringing for every American taxpayer after the Biden Administration’s decision to eliminate verification requirements for student loan payments,” Foxx said. “We are asking Secretary Cardona to provide answers about how the Department plans to deter fraud and protect taxpayers.”
The letter ends by asking Cardona to provide a timeline of when the department plans to address the issue and how it will prevent fraud. It remains to be seen what Cardona will say in response to the letter, but it’s clear that Republicans are not happy with the lack of verification measures in place for the loan repayment plan.