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Senate passes Baldwin’s legislation to stop student debt relief scams

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Posted at 12:10 PM, Dec 02, 2020
and last updated 2020-12-02 13:10:32-05

WISCONSIN — The U.S. Senate has unanimously passed Senator Tammy Baldwin's bipartisan legislation to stop student debt relief scams.

Many people struggle with student debt after graduating from college. However, students and borrowers also have to deal with scammers who claim to be offering debt relief.

That's why Senator Baldwin helped create legislation that will stop those debt relief scams in the U.S. That legislation was just passed by the U.S. Senate and is heading to the House of Representatives for approval.

“The additional repayment relief provided to many borrowers during the COVID-19 pandemic has unfortunately also created additional opportunities for fraudsters to do more harm. I’m so proud that my bipartisan reform has unanimously passed the Senate because it is just commonsense to stop these student loan debt relief scams that harm hardworking Americans and prevent them from getting ahead.”

Americans are facing more than $1.7 trillion in student loan debt, Baldwin said in a press release Wednesday. And debt relief scams are promising borrowers a quick fix with little hassle.

"These schemes robocall student loan borrowers until they agree to pay thousands of dollars in unnecessary fees for services that are available for free, claiming to reduce or forgive borrowers’ student debt," a press release from Baldwin said.

According to that press release, the Stop Student Debt Relief Scams Act will enhance law enforcement and administrative abilities to identify and shut down student debt relief scams. Specifically, the legislation will:

  • Clarify that it is a federal crime to access U.S. Department of Education information technology systems for fraud, commercial advantage, or private financial gain, and impose fines on scammers for violations of the law;
  • Direct the U.S. Department of Education to create a new form of third-party access, akin to the current “preparer” function on the Free Application for Student Aid (FAFSA) for those applying on behalf of a student and their family, in order to protect legitimate organizations;
  • Require the U.S. Department of Education to maintain common-sense reporting, detection, and prevention activities to stop potential or known debt relief scams; and
  • Require student loan exit counseling to warn federal loan borrowers about debt relief scams.

You can find more information about this legislation here.

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