Stop Student Debt Relief Scams Act

On December 1st, 2020 the U.S Senate passed S.1153, Stop Student Debt Relief Scams Act of 2019, introduced by Senator Tammy Baldwin (D-WI) and co-sponsored by four Democratic and four Republican senators. This bill was originally introduced simultaneously in the House of Representatives by Congressional Future Caucus (CFC) co-chair Rep. Haley Stevens (D-MI-11) as H.R 2888 with bipartisan co-sponsorship in May 2019. 

The Stop Student Debt Relief Scams act seeks to protect student loan borrowers by establishing criminal penalties for unauthorized access of certain student loan information. This information is often housed in the National Student Loan Data System or Department of Education which are at times fraudulently accessed by predatory companies or individuals for commercial advantage or financial gain.  In addition to placing criminal penalties of a prison term of up to 5 years, a fine of up to $20,000, or both, the Higher Education Act of 1965 will be amended to require higher education institutions to include in their student loan exit counseling information on how to protect oneself from third-party student debt predatory companies. Finally, this bill also works to prevent unauthorized access to student loan databases by strengthening data privacy and security measures for critical student information. In a press release Rep. Stevens said, “Millions of Americans are working hard to pay off their student loan debt, and they deserve to be protected from scammers who want to take advantage of them for financial gain.” 

As of 2019, 44 million Americans own student loan debt amounting to $1.6 trillion dollars largely concentrated among the youngest Americans. On average a student borrows around $30,000 in private and federal loans to complete their education with no guarantee of a career, and with prospects even less certain during the COVID-19 pandemic. As of 2019, 41% of recent graduates, and 33% of all college graduates, are “underemployed” meaning they are currently working in a job that does not require a college degree. This bill would aid those student loan borrowers who fall victim to predatory loan consolidation companies and nefarious individuals who prey on Millennial and Generation Z. 

Following unanimous consent from the Senate Committee on Health, Education, Labor and Pensions, S1153 passed the Senate on December 1st, 2020 and H.R 2888 passed in the House on December 7, 2020. As of December 22, 2020, the S. 1153 was signed into law by President Donald Trump as one of his final legislative acts as President of the United States.