DeVos sued for seizing student borrowers’ paychecks
Education Secretary Betsy DeVos is being sued by student advocacy organizations for continuing to garnish wages of student borrowers amid the coronavirus pandemic despite provisions against the practice in Congress’s coronavirus relief package.
Wage garnishment for student borrowers allowed the Department of Education to withhold up to 15 percent of wages from those who owe student debt.
The $2.2 trillion CARES Act passed by Congress last month called for the automatic suspension of principal and interest payments on federally held student loans, including garnishment of wages, through Sept. 30.
The class action lawsuit filed by Student Defense and the National Consumer Law Center (NCLC) alleges that the Education Department has continued garnishing student wages. It demands that the department stop doing so and refund any money taken from student borrowers.
The lead plaintiff is Elizabeth Barber, a home health aide, who earns $12.36 an hour and has seen her hours reduced since the start of the pandemic.
Barber claims the Education Department has been taking parts of her paycheck to go toward her student loans despite the provisions in the CARES Act. The NCLC said they have been “flooded” with complaints like Barber’s.
“Right now, low-wage workers hit hardest by the economic impact of the pandemic need their paychecks to keep food on the table and a roof over their heads,” Persis Yu, director of the NCLC, said in a statement.
“By continuing to use its harsh collection tools during this public health and economic crisis, the Department of Education is placing the health, safety, and well-being of vulnerable student loan borrowers in peril.”
Education Department spokeswoman Angela Morabito told The Hill the department is working to notify employers to stop garnishing wages as required by the stimulus bill passed last month.
Though the DOE did not comment on the specific litigation, they committed to processing refunds for those whose wages have been garnished since March 13, as the CARES Act specifies.
“Payments we receive via garnished wages will be immediately processed for refund, and the employer will be contacted again to ensure the guidance to stop garnishing wages is understood,” Morbito said. “The Department relies on employers to stop garnishing wages, but is taking every measure to contact employers and refund garnished wages to borrowers until.”
Sen. Cory Booker (D-N.J.), Rep. Ayanna Pressley (D-Mass.) and 40 members of Congress sent a letter last month to DeVos demanding that the department stop any ongoing “unlawful” garnishments of wages to collect federal student loan debt and to provide a clear timeline for when borrowers who have been affected can receive a full refund.
“Administration’s actions and disregard for these new protections under federal law will place workers and families in further economic jeopardy,” the lawmakers wrote.
Updated: 12:29 p.m.