The American Fintech Council (AFC) has called on the U.S. Department of Education to clarify the implications of the Stop Student Debt Relief Scams Act of 2019 (Stop Act) on legitimate financial tools used by borrowers. In a letter addressed to Secretary Linda McMahon, AFC emphasized the need for formal guidance to assure that authorized financial services are not restricted under this anti-fraud legislation.
Phil Goldfeder, CEO of AFC, stated, “Millions of Americans rely on trusted tools to manage their student loans—and they should be able to continue doing so with confidence.” He highlighted the potential for reassurance from the Department in protecting innovation and ensuring consumer-friendly services are not penalized due to misinterpretations of the law.
The AFC pointed out that while the Stop Act aims to prevent unauthorized access and deceptive activities, its broad language has caused confusion among responsible financial technology providers. This lack of clear public guidance has led some companies to reduce or halt services vital for loan verification, refinancing, payment automation, and employer contributions—actions that contradict the administration's goals of reducing regulatory barriers and supporting responsible innovation in student lending.
Ian P. Moloney, SVP and Head of Policy and Regulatory Affairs at AFC, remarked, “We recognize and appreciate the legislative intent behind the Stop Act to curtail practices that may harm student loan borrowers." He added that vague language complicates compliance efforts while offering innovative products consumers demand. Moloney urged the Department to affirm that borrowers can authorize access to their information and that legitimate tools respecting this consent should not face discouragement.
As a standards-based organization representing major fintech companies and innovative banks providing embedded finance solutions, AFC's mission is centered on promoting a transparent and inclusive financial system through responsible innovation in financial services.