The Government Accountability Office (GAO) reveals that two flaws within Biden's student debt relief program have left room for potential fraud. This program was recently invalidated by the Supreme Court in June. Although the program is no longer active, these findings may influence the structure of the Biden administration's upcoming endeavor for widespread debt cancellation, presently being developed by the Education Department. The GAO has advised that the subsequent program should incorporate more robust protocols that can detect and prevent fraud, as opposed to relying solely on self-reported data.
As of now, the Biden administration has not disclosed whether the new debt relief program will require applications or self-certification. Nevertheless, officials have expressed keenness in automating the process using existing data as much as possible. The recent findings have provided further ammunition to Republican critics of Biden's debt relief initiatives, accusing the administration of neglecting the cost to taxpayers. Detractors argue that the Education Department has not adequately addressed fraud concerns. However, the head of the office of Federal Student Aid held conflicting views with some of the GAO's findings but concurred with most of their recommendations.
The Education Department has defended its actions in combating fraud within the original program. It affirmed that measures were implemented to ensure that only qualified borrowers received relief. Nonetheless, the GAO's examination of fraud risks underscores the challenges confronting the Biden administration as they strive to implement such an extensive debt relief program. Announced in August 2022, the program aimed to grant relief to millions of borrowers and was the result of exhaustive policy discussions within the administration.In order to address concerns regarding the potential advantage to high earners, the White House has implemented income limitations for a particular program. However, this has presented a significant challenge for the Education Department, as they have limited access to income data for the majority of borrowers. In response, the administration swiftly developed a straightforward application, in which borrowers can declare that they meet the income requirements, under the risk of perjury. The Education Department promptly approved most of the applicants, but approximately 790,000 applications were flagged for further scrutiny.
Regrettably, the Department approved the remaining borrowers for relief without conducting a thorough evaluation of the process to detect fraudulent activities. In addition, the Government Accountability Office (GAO) criticized the Education Department's decision to automatically approve borrowers who did not submit an application, as the income information for around 2 million borrowers had not been verified.
