Biden’s Education Secretary faces criticism for possible fraud in student loan bailout plan.

House Republicans Question Education Secretary Over Potential for Fraud in Student Loan Repayment Plan

House Republicans are raising concerns about potential waste and fraud in the Education Department’s student loan repayment plan. Education Secretary Miguel Cardona is being questioned by House Oversight Committee Chairman Rep. James Comer (R-KY) and House Education and Workforce Committee Chairwoman Virginia Foxx (R-NC) over the department’s pursuit of an income-based repayment plan without verification measures in place for income.

Republicans Fear Self-Verification Could Lead to Abuse

The current plan in place stipulates lower monthly payments for those with lower incomes, but Republicans are concerned because the income is self-verified, potentially exposing the program to abuse. “The Biden Administration’s student loan bailout scheme leaves taxpayers holding the bag,” Comer told the Examiner. “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.”

The letter referenced the large amount of fraud that occurred with the Paycheck Protection Program during the COVID pandemic because of similar self-certification measures. Foxx said that the department was showing that it was not ready to restart the payment process.

Department’s Motives and Preparedness Questioned

“When borrowers initially enrolled in an [income-driven repayment] plan, they provided tax return information,” Foxx said. “It’s ridiculous for the Department to not enforce the program requirements. This decision calls into question the department’s motives and its overall preparedness to handle the return to repayment for millions of borrowers.”

The letter comes as the department is getting ready to resume student loan payments, something that has been paused for three years. 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.

Education Secretary Cardona Responds

“We’re preparing to restart repayment because the emergency period is over, and we’re preparing our borrowers to restart,” Cardona told senators during a hearing on Thursday. “We recognize that during the pandemic, it was very difficult for borrowers. 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.”

House Republicans are seeking answers from Education Secretary Miguel Cardona over the potential for waste and fraud in the department’s student loan repayment plan. The Republicans are concerned because the income is self-verified, potentially exposing the program to abuse. The letter referenced the large amount of fraud that occurred with the Paycheck Protection Program during the COVID pandemic because of similar self-certification measures. The letter comes as the department is getting ready to resume student loan payments, something that has been paused for three years.

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