- In a blistering report, the Government Accountability Office (GAO) exposed flaws in Biden’s student loan forgiveness plan
- The program ‘did not verify the self-reported income of certain borrowers before approving them for relief’
- Members of Congress quickly responded to the report, criticizing Biden and Education Secretary Miguel Cardona
The Biden administration received a major slap on the wrist from one of its own for failing to implement strong anti-fraud measures in its original plan to hand out $430 billion in student loans.
In a blistering report released yesterday, the Government Accountability Office (GAO) exposed flaws in Biden’s student loan forgiveness plan — which has since been rejected by the Supreme Court — and said it opened the door to fraud.
“We found that the education system was quickly approving borrowers for debt relief without implementing key practices to prevent fraud. For example, it did not verify the self-reported income of certain borrowers before approving them for relief.”
Additionally, it said the department has approved more than 12 million loan applicants “without evaluating the accuracy and results of the application process.”
And 2 million students would be automatically approved based on their self-reported income, without the Department of Education deploying “any tools to verify these borrowers’ incomes or ensure they qualified for relief.”
Members of Congress quickly responded to the report, criticizing Biden and Education Secretary Miguel Cardona.
Education Secretary Miguel Cardona was criticized by Republicans for the blistering report
Education Secretary Cardona and President Biden in the Roosevelt Room
Sens. Bill Cassidy, R-La., and Rand Paul, R-Ky., accused the Department of Education of “covering up” the potential fraud risks.
The senators said the agency “misused” the “Controlled Unclassified Information” designation in an effort to conceal information presented by GAO on fraud risks in its “student loan cancellation scheme.”
“As members of Congress, we recognize the need to protect highly sensitive information from public release when it poses a threat to public safety or is required by law,” Cassidy and Paul said in a letter to the department.
“However, when there is no legitimate basis for protecting information, it is important to ensure maximum transparency for the American people.”
“The executive branch should never unnecessarily use its own designations simply to hide material from the public because it is embarrassing or difficult to explain.”
Republican senators then criticized the department for failing to provide guardrails to verify borrowers’ incomes to determine their eligibility for the benefits.
GAO said it conducted the investigation because “fraud poses a significant threat to the integrity of federal programs and erodes public confidence in government.”
Education Secretary Miguel Cardona, domestic policy advisor Neera Tanden and Towson University President Mark Ginsberg meet with students during a visit to Towson University
“Proactively managing fraud risk can ensure taxpayers’ money serves its intended purpose.”
The Department of Education is expected to consider the GAO’s recommendations as it works on a new path for loan forgiveness.
A department spokesperson defended the administration in a statement to Politico.
The department has “a carefully tailored fraud risk management strategy to ensure only qualified borrowers receive relief while protecting borrowers from scams,” the spokesperson claimed.