Implementing the Stop Act

Act establishes changes to help prevent third-party access to students’ financial aid records

By Rick Cox

The Stop Act, or the Stop Student Debt Relief Scams Act, was signed into law on December 22, 2020, and requires the U.S. Department of Education to take action to prevent improper use of access devices to students’ financial aid records. It ensures that reporting detection and prevention of activities are in place and that exit counseling warns federal loan borrowers about debt relief scams. The Stop Act also prevents unauthorized access to the Department of Education’s data system related to loan activities and establishes requirements for Third Party Access. Unauthorized access for criminal or private financial gain can result in criminal penalties.

It is important to educate staff and students on the need to protect their Federal Student Aid ID or access to the Department of Education’s systems. Students should never share their FSA ID with anyone, including the college’s staff.

  • has updated their exit counseling. All institutions should ensure their exit counseling has been updated.
  • Criminal penalties for unauthorized access for criminal or private financial gain have been established and were applicable as of September 11, 2021. These penalties are fines of not more than $20,000, imprisonment of not more than 5 years or both.
  • Your institution’s authorized users with access to the Department of Education’s systems should complete security training at least annually.
  • As a reminder, PDPAs should promptly take the steps necessary to remove access for those who no longer need access because of changed positions, employment termination or similar situations.
  • If Personally Identifiable Information or Controlled Unclassified Information is provided to or viewed by an unauthorized individual, a breach report is required. This must be submitted to the department to notify them of the breach.

Key points to keep in mind:

  • Do not share or use someone’s FSA ID since this is considered a criminal act.
  • Make sure you have updated your internal exit counseling.
  • The Stop Act is designed to safeguard against predatory practices toward federal loan borrowers.
  • All users of the department’s IT system must read and understand the Code of Conduct.

Rick Cox is Global’s Executive Director of Regulatory Affairs and Compliance