Calls for public guidance affirming that responsible student loan tools are not restricted under anti-fraud law

Washington, D.C. (June 17, 2025) – The American Fintech Council (AFC), the premier industry association representing responsible fintech companies and innovative banks, sent a letter to Secretary Linda McMahon urging the U.S. Department of Education to issue formal guidance clarifying that the Stop Student Debt Relief Scams Act of 2019 (Stop Act) does not prohibit borrowers from using authorized financial tools and services. AFC’s request aims to address growing uncertainty that has disrupted access to trusted services and discouraged innovation in the student loan space.

“Millions of Americans rely on trusted tools to manage their student loans—and they should be able to continue doing so with confidence,” said Phil Goldfeder, CEO of the American Fintech Council. “The Department has an opportunity to reassure borrowers, protect innovation, and ensure that consumer-friendly services aren’t unintentionally penalized by misinterpretation of a law that was intended to prevent fraud, not block responsible financial tools.”

AFC’s letter underscores that while the intent of the Stop Act is to prevent unauthorized access and deceptive activity, its broad language has created confusion for responsible financial technology providers and their partners. The lack of clear public guidance from the Department has led some companies to scale back or suspend services that borrowers rely on for loan verification, refinancing, payment automation, and employer contributions. These disruptions, AFC argues, run counter to the administration’s stated goals of reducing regulatory barriers and supporting responsible innovation in student lending.

“We recognize and appreciate the legislative intent behind the Stop Act to curtail practices that may harm student loan borrowers. To that end the industry wants to do the right thing – but vague language and inconsistent interpretation make it harder to ensure compliance while also offering the innovative products and services consumers demand,” said Ian P. Moloney, SVP and Head of Policy and Regulatory Affairs at AFC. “We are asking the Department to clearly state what is already true: borrowers can authorize access to their information, and legitimate tools that honor that consent should not be discouraged. With the right signal, we can protect consumers while advancing safe, modern financial solutions.”

A standards-based organization, AFC is the premier trade association representing the largest financial technology (Fintech) companies and innovative banks offering embedded finance solutions. AFC’s mission is to promote a transparent, inclusive, and customer-centric financial system by supporting responsible innovation in financial services and encouraging sound public policy. AFC members foster competition in consumer finance and pioneer products to better serve underserved consumer segments and geographies.

‍