Photo by Hannah Wei on Unsplash

The Biden administration will not require borrowers to provide up front proof of their income to receive up to $20,000 in student loan “forgiveness” courtesy of the American taxpayer. This leaves the program vulnerable to serious fraud and abuse.

The White House’s student loan forgiveness plan would cancel $10,000 in student loan debt for borrowers making less than $125,000. Pell Grant recipients who make less than $125,000 would be eligible for $20,000 in cancellation. For couples that file jointly, the limit would be $250,000.  

The application for forgiveness, however, only requires borrowers to provide their name, Social Security number, date of birth, phone number, and email address. The applicant then simply checks a box to self-attest that their income is below the qualification threshold.

Previously, Biden’s Department of Education admitted that it is “unable to cancel federal student loans based on a borrower’s income level without requiring some action from the borrower,” because it lacks income data for most Americans. Mind-numbingly, the agency still chose to not require any action from borrowers to prove their income level.  

Instead, their plan to prevent fraud is to use a risk formula to determine who may be higher income, based on “known characteristics” of borrowers.   

Those the agency believes are higher income will then be required to undergo extra scrutiny and submit further documentation to the government.  

By completing a Free Application for Federal Student Aid (FAFSA) form and receiving federal student loans, you have provided information to the DOE regarding your income level as a student, your parents’ financial situation, your gender, race, country and/or state of origin, level of education you achieved, and some more basic information about you.  

While these characteristics could shed some light on how much you make nowthis information is certainly not sufficient to prove income levels of borrowers across the country.  

A borrower may have grown up under rough circumstances, for example, but this does not mean he/she makes under $125,000 a year now or isn’t in a marriage where their partner puts them over the $250,000 joint filing threshold.  

This potential for fraud could be eliminated by simply requiring borrowers, in their applications, to provide proof of their income, like a tax return.  

But, as Education Department officials detailed to Politico in May, “That added layer of bureaucracy would likely take longer for the Education Department to implement… it would mean that borrowers would miss out on the benefit if they don’t know to sign up or apply for it.” 

In other words, if the application process is made slightly more difficult, they anticipate people not taking advantage of it.  

In reality, being good stewards of taxpayer dollars is more important than ensuring those who cannot attach a file to an application get this handout.  

This program could cost taxpayers over $1 trillion. The very least the Education Department could do for taxpayers is take basic steps to ensure the program is not fraught with waste and abuse.