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Biden’s Student Loan Fraud Check

Biden’s Student Loan Fraud Check

November 21, 2023

A GAO report says the feds did nothing to stop fraudulent cancellation.

Did the Biden Administration learn anything from the massive fraud in pandemic spending programs? Apparently not judging from a new Government Accountability Office report that found the Education Department failed to implement basic checks to prevent fraud in its student loan forgiveness plan.

The Supreme Court struck down the Administration’s $430 billion debt writeoff in June, but the GAO review is relevant since the Education Department is canceling hundreds of billions of dollars in student loans via the back door.

Under the President’s original plan, borrowers who earned less than $125,000 ($250,000 for couples) were eligible for $10,000 to $20,000 in forgiveness. But the Education Department let borrowers “self-attest” that their incomes fell below these thresholds. In other words, trust, but don’t verify.

When the department “ceased work on the program in response to court orders and prior to relieving any loan debt, more than 26 million borrowers had applied for or were deemed automatically eligible for relief,” GAO notes.

As a result, the department “would have needed to claw back relief from borrowers who were improperly provided relief via a ‘pay-and-chase’ model,” GAO explains. That’s what the government has been trying to do with little avail after doling out hundreds of billions of dollars in pandemic-enhanced unemployment benefits and small business loans to scammers.

The department defended its lax protocols by claiming without evidence that debt relief was at low risk for fraud compared to cash payments. It also complained that stricter controls “could be time-intensive, costly, and overly burdensome.” Since when does the bureaucracy care about efficiency and costs?

GAO says the program’s scale “rendered it inherently at risk for fraud and necessitated effective fraud risk management.” Yet the Administration’s goal was to cancel debt before courts could stop it.

The GAO review has implications for Mr. Biden’s new loan repayment plans that cap borrower payments at 5% of discretionary income and discharge loans after 10 to 20 years. GAO notes that an earlier review of income-based repayment plans found some borrowers incorrectly reported their incomes, yet the department doesn’t seem to care.

The Biden political business model is to send as much taxpayer money to as many voters as fast as possible. If much of it goes to people who don’t qualify, well, that’s merely the cost of doing government business.

Wall Street Journal Editorial Board, 11/21/23

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GHvV COMMENT:  It's hard to separate the foxes from the chickens: Is it corrupt vote buying or simple incompetence that compels this behavior? Have our "checks and balances" of Congress versus the Executive branch deteriorated to such an extent that Presidential fiat reigns? 

It's time to recognize the use of "Executive Orders" as a reach beyond the Constitution.

It's time for Representatives and Senators (especially Representatives) from both parties to do their jobs and stop partisan squabbles and posturing. Fraud and Waste hurt all of us.