Stop Student Debt Relief Scams Act of 2019
Floor Speech
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Ms. STEVENS. Mr. Speaker, I move to suspend the rules and pass the bill (S. 1153) to explicitly make unauthorized access to Department of Education information technology systems and the misuse of identification devices issued by the Department of Education a criminal act.
The Clerk read the title of the bill.
The text of the bill is as follows: S. 1153
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE.
This Act may be cited as the ``Stop Student Debt Relief Scams Act of 2019''. SEC. 2. CRIMINAL PENALTIES.
(a) In General.--Section 490 of the Higher Education Act of 1965 (20 U.S.C. 1097) is amended by adding at the end the following:
``(e) Access to Department of Education Information Technology Systems for Fraud, Commercial Advantage, or Private Financial Gain.--Any person who knowingly uses an access device, as defined in section 1029(e)(1) of title 18, United States Code, issued to another person or obtained by fraud or false statement to access Department information technology systems for purposes of obtaining commercial advantage or private financial gain, or in furtherance of any criminal or tortious act in violation of the Constitution or laws of the United States or of any State, shall be fined not more than $20,000, imprisoned for not more than 5 years, or both.''.
(b) Guidance.--The Secretary shall issue guidance regarding the use of access devices in a manner that complies with this Act, and the amendments made by this Act.
(c) Effective Date of Penalties.--Notwithstanding section 6, the penalties described in section 490(e) of the Higher Education Act of 1965 (20 U.S.C. 1097), as added by subsection (a), shall take effect the day after the date on which the Secretary issues guidance regarding the use of access devices, as described in subsection (b). SEC. 3. LOAN COUNSELING.
Section 485(b) of the Higher Education Act of 1965 (20 U.S.C. 1092(b)) is amended--
(1) in clause (viii), by striking ``and'' after the semicolon; and
(2) by adding at the end the following:
``(x) an explanation that--
``(I) the borrower may be contacted during the repayment period by third-party student debt relief companies;
``(II) the borrower should use caution when dealing with those companies; and
``(III) the services that those companies typically provide are already offered to borrowers free of charge through the Department or the borrower's servicer; and''. SEC. 4. PREVENTION OF IMPROPER ACCESS.
Section 485B of the Higher Education Act of 1965 (20 U.S.C. 1092b) is amended--
(1) by redesignating subsections (e) through (h) as subsections (f) through (i), respectively;
(2) in subsection (d)--
(A) in paragraph (5)(C), by striking ``and'' after the semicolon;
(B) in paragraph (6)(C), by striking the period at the end and inserting ``; and''; and
(C) by adding at the end the following:
``(7) preventing access to the data system and any other system used to administer a program under this title by any person or entity for the purpose of assisting a student in managing loan repayment or applying for any repayment plan, consolidation loan, or other benefit authorized by this title, unless such access meets the requirements described in subsection (e).'';
(3) by inserting after subsection (d) the following:
``(e) Requirements for Third-Party Data System Access.--
``(1) In general.--As provided in paragraph (7) of subsection (d), an authorized person or entity described in paragraph (2) may access the data system and any other system used to administer a program under this title if that access--
``(A) is in compliance with terms of service, information security standards, and a code of conduct which shall be established by the Secretary and published in the Federal Register;
``(B) is obtained using an access device (as defined in section 1029(e)(1) of title 18, United States Code) issued by the Secretary to the authorized person or entity; and
``(C) is obtained without using any access device (as defined in section 1029(e)(1) of title 18, United States Code) issued by the Secretary to a student, borrower, or parent.
``(2) Authorized person or entity.--An authorized person or entity described in this paragraph means--
``(A) a guaranty agency, eligible lender, or eligible institution, or a third-party organization acting on behalf of a guaranty agency, eligible lender, or eligible institution, that is in compliance with applicable Federal law (including regulations and guidance); or
``(B) a licensed attorney representing a student, borrower, or parent, or another individual who works for a Federal, State, local, or Tribal government or agency, or for a nonprofit organization, providing financial or student loan repayment counseling to a student, borrower, or parent, if--
``(i) that attorney or other individual has never engaged in unfair, deceptive, or abusive practices, as determined by the Secretary;
``(ii) that attorney or other individual does not work for an entity that has engaged in unfair, deceptive, or abusive practices (including an entity that is owned or operated by a person or entity that engaged in such practices), as determined by the Secretary;
``(iii) system access is provided only through a separate point of entry; and
``(iv) the attorney or other individual has consent from the relevant student, borrower, or parent to access the system.''; and
(4) in subsection (f)(1), as redesignated by paragraph (1)--
(A) in subparagraph (A), by striking ``student and parent'' and inserting ``student, borrower, and parent'';
(B) by redesignating subparagraphs (C) and (D) as subparagraphs (D) and (E), respectively;
(C) by inserting after subparagraph (B) the following:
``(C) the reduction in improper data system access as described in subsection (d)(7);''; and
(D) by striking subparagraph (E), as redesignated by subparagraph (B), and inserting the following:
``(E) any protocols, codes of conduct, terms of service, or information security standards developed under paragraphs (6) or (7) of subsection (d) during the preceding fiscal year.''. SEC. 5. AGENCY PREVENTION AND DETECTION.
Section 141(b)(2) of the Higher Education Act of 1965 (20 U.S.C. 1018(b)(2)) is amended by adding at the end the following:
``(C) Taking action to prevent and address the improper use of access devices, as described in section 485B(d)(7), including by--
``(i) detecting common patterns of improper use of any system that processes payments on Federal Direct Loans or other Department information technology systems;
``(ii) maintaining a reporting system for contractors involved in the processing of payments on Federal Direct Loans in order to allow those contractors to alert the Secretary of potentially improper use of Department information technology systems;
``(iii) proactively contacting Federal student loan borrowers whose Federal student loan accounts demonstrate a likelihood of improper use in order to warn those borrowers of suspicious activity or potential fraud regarding their Federal student loan accounts; and
``(iv) providing clear and simple disclosures in communications with borrowers who are applying for or requesting assistance with Federal Direct Loan programs (including assistance or applications regarding income-driven repayment, forbearance, deferment, consolidation, rehabilitation, cancellation, and forgiveness) to ensure that borrowers are aware that the Department will never require borrowers to pay for such assistance or applications.''. SEC. 6. EFFECTIVE DATE.
This Act, and the amendments made by this Act, shall take effect on the date that is 180 days after the date of enactment of this Act.
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Ms. STEVENS. 1153, the Stop Student Debt Relief Scams Act of 2019.
Mr. Speaker, I rise in strong support of S. 1153, the Stop Student Debt Relief Scams Act, today.
I would like to thank my colleague, Congressman Smucker, for cointroducing this bill with me and for his efforts to end these debt relief scams. We all know that our country faces a mounting student debt crisis, with Americans now holding more than $1.5 trillion in student loan debt.
Predatory scammers are increasingly taking advantage of student loan borrowers, who face a complicated loan repayment process. These unscrupulous scams defraud student borrowers by providing deceptive information to mislead them into paying thousands of dollars for services that the Federal Government already provides for free.
These scams come by way of robocalls. They are harassing and menacing, and the victims of these schemes are not only defrauded but, unknowingly, become delinquent on their payments and default on their loans, falling even deeper into debt.
We hear this time and time again because these phone calls come to your personal cell phone even if you don't have a student loan.
In 2007, I took out $9,000 of student loans to finish my last semester of graduate school. I was able to repay that loan within 6 years. Years later, I still receive these very types of menacing phone calls, to my personal cell phone, of scams asking me to go through these programs.
These are individuals who receive information through the Department of Education. This is what we are trying to stop. They are accessing your personal information to scam you.
This is what we are here today to stop. This problem, unfortunately, during COVID-19 has only exacerbated. During this pandemic, the relief that was provided to help Federal student loan borrowers under the CARES Act has created additional opportunities for scammers to target desperate Americans.
This bill will ensure that the Department of Education and law enforcement agencies have the tools they need to crack down on these predatory fraudsters. It will also empower student borrowers by providing counseling and resources to make sure that all borrowers are aware of these potential scams and receive accurate information about the repayment options.
Knowledge is power here. It is time to stop these scammers from jeopardizing the financial future of student borrowers, and I urge my colleagues to support the passage of this bill.
He is called the gentleman from Pennsylvania, but some of us also call him the gentleman from Lancaster.
I truly want to thank my colleague on the other side of the aisle, Mr. Smucker, for his leadership on this critical piece of bipartisan legislation to stand up for hardworking Americans, to stand up for our students, and to put into place a clarified law declaring that it is a Federal crime to access U.S. Department of Education information technology systems for purposes of fraud, commercial advantage, or private financial gain, and that fines these scammers up to $20,000, or up to 5 years of imprisonment, as my colleague so nicely articulated.
This is an attempt today to shut down predatory scammers who are targeting our student borrowers, for the financial health of the American people.
Again, I strongly encourage my colleagues on both sides of the aisle to join us here today in passing this critical piece of legislation.
Ms. JACKSON LEE. Mr. Speaker, as a senior member of the Judiciary, Homeland, and Budget Committees, I rise in strong support of S. 1153, the ``Stop Student Debt Relief Scams Act,'' which helps protect borrowers from deceptive student debt relief scams by enhancing law enforcement and administrative abilities to identify and shut down such student debt relief scams.
With ordinary Americans facing nearly $1.5 trillion in student loan debt, borrowers are looking for relief wherever they can find it but unfortunately many borrowers do not receive the right information about how to find out and qualify for opportunities to get help with lowering or postponing their payments or applying for relief, nearly all of which is available for free.
These include income-driven repayment, deferment, forbearance, consolidation, rehabilitation, and even some programs for loan forgiveness.
Debt relief scams falsely promise borrowers a quick fix with little hassle and their business model is to robocall student loan borrowers until they agree to pay thousands of dollars in unnecessary and exorbitant fees for services that are already available for free.
They claim to reduce or forgive borrowers' student debt and take care of all the paperwork.
Some even purport to be associated with the federal government.
Most victims of these deceptive debt relief scams are not only defrauded by the companies that promised to help them, but unknowingly become delinquent on their payments and default on their loans, miss communications with their servicers, and fall even deeper into debt.
S. 1153, the Stop Student Debt Relief Scams Act of 2019 would accelerate the end to this rampant misconduct.
Specifically, the Stop Student Debt Relief Scams Act of 2019 will enhance law enforcement and administrative abilities to identify and shut down student debt relief scams by:
Clarifying 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 fines scammers up to $20,000, up to 5 years imprisonment, or both, for violations of the law;
Directing 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--such as legal aid groups--that help borrowers navigate repayment;
Requiring the U.S. Department of Education to maintain commonsense reporting, detection, and prevention activities to stop potential or known debt relief scams; and
Requiring student loan exit counseling to warn federal loan borrowers about debt relief scams, in recognition of the fact that borrowers may fall prey to false promises because they lack sufficient information on legitimate programs to help them manage repayment.
This is needed legislation and I am pleased it has been endorsed by Education Finance Council, Generation Progress, National Consumer Law Center (on behalf of its low income clients), National Council of Higher Education Resources, Student Loan Servicing Alliance, The Institute for College Access and Success, and Young Invincibles.
I urge all Members to join me in voting for S. 1153, the ``Stop Student Debt Relief Scams Act.''
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