Title: Stop Student Debt Relief Scams Act of 2019
Policy area: Education

Summary:
Stop Student Debt Relief Scams Act of 2019
This bill establishes criminal penalties for unauthorized access of certain student loan information and expands the requirements for student loan exit counseling.
Specifically, the bill makes it a crime to knowingly use an access device (e.g., account number) that was issued to another person or was fraudulently obtained to access Department of Education (ED) information technology systems for commercial advantage or private financial gain. A violator is subject to criminal penalties—a fine, a prison term of up to five years, or both.
Further, the bill expands loan exit counseling requirements to require an institution of higher education that participates in federal student-aid programs to provide an explanation to borrowers cautioning them about third-party student debt relief companies.
It also requires ED to prevent unauthorized access to the central database for student aid (i.e., the National Student Loan Data System) and warn borrowers of suspicious activity regarding their student loan accounts.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 1153 Introduced in Senate (IS)]

<DOC>






116th CONGRESS
  1st Session
                                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.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 11, 2019

 Ms. Baldwin (for herself, Mr. Braun, Mrs. Shaheen, and Mrs. Fischer) 
introduced the following bill; which was read twice and referred to the 
          Committee on Health, Education, Labor, and Pensions

_______________________________________________________________________

                                 A BILL


 
   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.

    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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