Congress Passed the Stop Student Debt Relief Scams Act of 2019 (STOP) to Crack Down on Debt Relief Scammers While Protecting Borrowers’ Access to Legal Counsel; ED Has Failed to Fully Implement
August 11, 2022 | WASHINGTON, D.C. — Over 100 advocates on behalf of student loan borrowers, including law professors and attorneys who routinely assist student loan borrowers, sent a letter to the Department of Education (ED) urging it to implement key provisions of the STOP Act. A coalition of state student loan ombudspersons concurrently submitted ED a letter urging the same. For over a year, ED has failed to implement the provisions of the STOP Act that ensure financial counselors and attorneys have the information necessary to assist borrowers to navigate their federal student loans.
Read the advocates’ letter here: https://protectborrowers.org/2022-08-10-stop-act-advocate-letter/
Read the state student loan ombudspersons’ letter here: https://protectborrowers.org/stop-act_state-student-loan-ombuds-advocacy-letter_8-11-22/
The failure to create a third-party access system especially harms the most vulnerable borrowers, “such as those who are elderly, disabled, low-income, or experiencing housing insecurity, job loss, and other traumas, do not have internet access and/or cannot navigate an interactive website like studentaid.gov.”
From the letter:
ED must urgently implement the third-party data access system, particularly in light of the major recent ED actions such as the Public Service Loan Forgiveness waiver, Income-Driven Repayment account adjustment, and the impending restart of loan repayment for millions of Americans.
Congress passed the STOP Act in 2019, intending to crack down on debt relief scammers. The act imposes criminal penalties on third parties who obtained data held by ED about a borrower by using that borrower’s log-in and password to access ED websites. Congress intended that before those criminal penalties took effect, ED would create a third-party data-access system so that legal aid and private attorneys could obtain their clients’ student loan information without needing to log in to each borrower’s studentaid.gov account. The STOP Act stated that it would take effect on June 20, 2021—180 days after December 22, 2020—but over a year later, ED has failed to create a third-party access system for student loan borrower advocates. Yet the STOP Act’s criminal penalties are in force.
In any given year, scores of legal aid and private attorneys have historically counseled thousands of federal student loan borrowers about their rights to an administrative discharge, income driven repayment plans, loan default recovery options, and many other student loan issues. Advocates, particularly legal aid and some private attorneys, rely on borrowers’ National Student Loan Database System (NSLDS) data from Federal Student Aid to provide competent and accurate legal advice to these clients.
The implementation of the third-party access system is particularly urgent for the most vulnerable populations, who are unable to quickly and easily share their loan information with attorneys. Older borrowers in particular may not have the experience necessary to access, download, and share their NSLDS data with attorneys or to check it consistently for necessary updates. Borrowers with certain disabilities may physically be unable to operate a computer. Similarly, borrowers who do not have technology such as a computer or broadband access are not able to download this information on their own and share it with an attorney.
About Student Borrower Protection Center
The Student Borrower Protection Center (SBPC) is a nonprofit organization focused on alleviating the burden of student debt for millions of Americans. The SBPC engages in advocacy, policymaking, and litigation strategy to rein in industry abuses, protect borrowers’ rights, and advance economic opportunity for the next generation of students.