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 May 14, 2023

Joe Biden's Education Secretary Miguel Cardona facing allegations of fraud

The Daily Wire reports that House Republicans have asked Education Secretary Miguel Cardona to explain how the U.S. Department of Education's student loan repayment plan isn't a breeding ground for fraud and waste. 

U.S. Rep. James Comer (R-KY) - the chairman of the House Oversight Committee Chairman - and U.S. Rep. Virginia Foxx (R-NC) - the chairwoman of the House Education and Workforce Committee - did so in a letter that they sent to Cardona on Friday.

The background, here, is that the Department of Education is allowing federal student loan borrowers to enter into a repayment plan based on their income.

The Washington Examiner explains:

The income-driven repayment program 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.

Comer and Foxx are concerned that this approach could be abused.

They are specifically concerned with the fact that, under the plan, the borrower's income is self-verified rather than independently verified.

Comer released a statement on the matter, saying:

The Biden Administration’s student loan bailout scheme leaves taxpayers holding the bag. 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.

At the time of this writing, Cardona has not responded to the Republicans' concerns.

President Joe Biden extended the moratorium on federal student loan payments several times in the name of the COVID-19 pandemic. Altogether, borrowers were given a three-year break from making payments.

Now, however, the emergency status of the pandemic has ended, and, with it, the moratorium on student loan payments has also come to an end.

Federal student loan borrowers are scheduled to begin, once again, making payments on their loans in October.

There is still, however, the matter of Biden's student debt cancellation plan. The plan could potentially result in federal student loan borrowers receiving as much as $20,000 each in loan forgiveness. But, the plan has been legally challenged.

The U.S. Supreme Court has already heard arguments, and a decision is expected in the coming months.

There's no telling how the justices will rule. But, the ruling could have a substantial impact on repayment.

Written By:
Oliver Winters

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