Posted on July 25, 2019
WASHINGTON, July 25, 2019 — The Government Accountability Office (GAO) today released a report highlighting fraud and errors in income-driven student loan repayment programs. The Department of Education suggested the solution to this issue is passing the Faster Access to Federal Student Aid (FAFSA) Act—legislation passed by the Senate last year and sponsored by Senate education committee Chairman Lamar Alexander (R-Tenn.) and Ranking Member Patty Murray (D-Wash.).
“The Government Accountability Office uncovered potential fraud and errors in income-driven repayment plans. This is a program that 167,500 Tennesseans use to repay their federal student loans each year. Fortunately, there’s a solution to this problem that the United States Senate has already passed once. Last Congress, my colleagues and I passed legislation that would automatically send borrowers’ IRS tax information to the Department of Education. It would also prevent the 400,000 Tennesseans who fill out the FAFSA every year from being subjected to the burdensome verification process. The Senate should pass again this year the bipartisan legislation that would prevent fraud and errors and make it easier for borrowers to repay their loans.”
Background on Income Driven Repayment:
- Almost a third of borrowers in repayment on federal student loans are in an income-driven repayment (IDR) program, which require that borrowers certify their income annually.
- Each year 19 percent of these borrowers fail to recertify their income on time, resulting in payment spikes and higher loan balances for approximately 1.3 million borrowers.
The Faster Access to Federal Student Aid (FAFSA) Act will make FAFSA completion easier and more secure for nearly 20 million students by:
- Improving and securing the way individuals’ IRS tax information is sent to the Department of Education.
- Turning a 7-click process into a single click process – that answers at least 11 and up to 22 questions – to transfer IRS tax filling data to the Department of Education.
- Allowing 8 to 9 million more FAFSA filers to use their existing IRS tax filing information.
- Reducing the burdensome verification processes for students and parents filing for aid.
- Automating the annual process for 7 million borrowers in income driven repayment to recertify their income and remain in their repayment plan.