EXCLUSIVE — A group of House Republicans is demanding the Department of Education explain what the agency is doing to address possible fraud in the department's new income-driven repayment policies for student loans.
In a letter sent to Education Secretary Miguel Cardona Friday, House Oversight Committee Chairman James Comer (R-KY) and House Education and Workforce Committee Chairwoman Virginia Foxx (R-NC) expressed concern that the department's new regulations for income driven repayment would lead to fraud as they do not require a borrower to verify their income.
The income driven repayment program or IDR allows student loan borrowers to make lower monthly payments corresponding to their income above the poverty line. Under the Biden administration's rules, the program requires borrowers to pay 5% of discretionary income, or income above the poverty line.
In the letter, the lawmakers, which also included Rep. Pete Sessions (R-TX), noted that a system of self-certification of income had led to a substantial amount of fraud in the government's Paycheck Protection Program, which had offered loans to businesses during the COVID-19 pandemic that were ultimately forgiven.
"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," the lawmakers wrote, noting that the Government Accountability Office had expressed similar concerns about the income driven repayment program's lack of verification protocols.
The lawmakers asked the department to provide a briefing to committee staff on the department's legal authority for the change in verification requirements and explain why it made the change in the first place.
"The Biden Administration’s student loan bailout scheme leaves taxpayers holding the bag," Comer told the Washington Examiner in a statement. "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.”
Education and Workforce Committee Chairwoman Foxx said the changes to the income verification in IDR by the Biden administration had opened up the program to potential abuse and fraud, and thus harming taxpayers.
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"When borrowers initially enrolled in an IDR plan they provided tax return information," Foxx told the Washington Examiner. "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 Washington Examiner has reached out to the Department of Education for comment.