The General Accountability Office, the investigative arm or watchdog of the U.S. Congress, issued a scathing report against the U.S. Department of Education on November 16.
The criticism regarded the execution of the hoped-for student loan forgiveness program that was launched prior to the U.S. Supreme Court striking down the program as unlawful.
In June 2023, the U.S. Supreme Court struck down the post-pandemic student debt relief program based on its 6-3 decision that it required Congressional approval. Chief Justice John Roberts denoted that Biden led an attempt to re-write current law without Congressional approval.
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The next big beef against the program is now the GAO’s finding that the U.S. Department of Education was approving student loans without mandated fraud protections executed to protect taxpayers from potentially losing millions—or billions—of dollars to fraudulent yet unchecked forgiveness applications.
The GAO report states, “We found that Education quickly approved borrowers for debt relief without applying key practices to prevent fraud. For example, it didn’t verify certain borrowers’ self-reported income before approving them for relief.”
The GAO report continues that the U.S. Department of Education had assessed there was little risk for fraud. However, the GAO defended its position by stating, “However, given the large scale of the program—an estimated $430 Billion of relief for potentially over 31 Million borrowers, leading practices indicate that Education should have proactively addressed risks…”
Specifically, the GAO pointed to the U.S. Department of Education as approving “12 Million-plus borrowers,” with no income verification process and no” checks and balances” system to ensure the Department of Education was effectively managing the student debt relief program to mitigate fraud.
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