Student Advocates Sue Education Dept. for Wage Garnishments in Loan Defaults

May 4, 2020 by Tom Ramstack
The campus of Georgetown University. (Photo by Dan McCue)

WASHINGTON – Higher education advocacy groups are suing the U.S. Education Department for continuing to garnish the wages of persons who default on student loan payments during the coronavirus epidemic.

Education Secretary Betsy DeVos announced March 25 her department would suspend the wage garnishments while a big swath of the U.S. economy shut down and unemployment skyrocketed.

The National Student Defense Legal Network, with support from the National Consumer Law Center and the Student Borrower Protection Center, says in a lawsuit filed last week that the garnishments have not stopped.

Their class action lawsuit accuses DeVos and the Education Department of violating the Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act.

President Trump signed the CARES Act into law March 27 as a $2 trillion economic stimulus measure to help the nation’s economy withstand devastation from the coronavirus shutdown. It was part of a federal policy that also sought to halt evictions, foreclosures and student debt collections for at least six months.

“Despite the department’s announcement that it had stopped wage garnishments, and despite the department’s notice to student loan borrowers that it had done the same, the department, more than a month into the six-month emergency suspension period, continues to seize wages from distressed federal student loan borrowers,” the lawsuit filed in the U.S. District Court for the District of Columbia says.

In 2018, the Education Department reported that it garnished more than $840 million from borrowers with federal Direct Loans.

The lawsuit uses the example of Elizabeth Barber, a 59-year-old home health aide who earns $12.89 per hour. She owes about $10,000 on student loans after studying psychology at Nazareth College.

Her hours for an assisted home care company in Rochester, N.Y., have been reduced during the pandemic, making it difficult for her to pay routine debts. She is in default on her student loan.

She cares for patients with cerebral palsy who need extensive assistance with personal care.

“As Ms. Barber continues to assist clients in need, the [Education] Department—in violation of the CARES Act—continues to garnish approximately 12% of her paychecks,” the lawsuit says. “Most recently, the Department illegally garnished $70.20 from her April 24, 2020 paycheck.”

She is suing on behalf of about 285,000 student loan borrowers whose wages are being garnished, the lawsuit says.

The Education Department declined to comment on the litigation. However, a statement from the department said it has taken immediate action to notify employers to stop garnishing wages for student loan defaults.

“The department’s default loan servicer called employers by phone, sent emails when possible, and mailed letters to employers who could not be reached any other way,” the statement says. “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. The department relies on employers to stop garnishing wages, but is taking every measure to contact employers and refund garnished wages to borrowers until Sept. 30, 2020.”

The consumer advocacy groups that are suing say the Education Department’s response is inadequate.

The department’s pledge to refund garnished wages is likely to take months at a time some borrowers are becoming desperate because of high unemployment.

One of them is the lead plaintiff in the class action lawsuit, the consumer advocates say.

“Ms. Barber is struggling to make ends meet, so every dollar counts as she tries to meet her immediate needs,” the lawsuit says.

“Ms. Barber often has to leave bills unpaid in order to cover her basic needs. She has no money in her checking or savings accounts, is in arrears on various local taxes, and is subject to a lien on her home,” the lawsuit says. “She is also past due on both her water and electric bills, which she cannot afford to pay in full each month. As her past due amounts continue to grow, the decrease in hours due to COVID-19 has magnified Ms. Barber’s financial struggles.”

The plaintiffs ask the federal court to invoke authority under the Administrative Procedures Act to “hold unlawful and set aside agency action . . . found to be . . . arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.”

In other words, they want the wage garnishments stopped.The case is Barber v. DeVos, U.S. Dist.Ct. – D.C. Case No. 20-cv-1137, filed April 30, 2020.

In The News

Health

Voting

Education

Flexible, Customized Schooling Could be Remedy for Education Inequality
Education
Flexible, Customized Schooling Could be Remedy for Education Inequality
February 26, 2021
by Kate Michael

WASHINGTON — COVID has taken a toll on student learning and wellbeing, but a coalition of community schools advocates believes they have the answer to correcting academic learning loss and supporting the holistic development of young people. They say their next-generation community schooling lays the foundation... Read More

School Voucher Push Taps Frustration Over Distance Learning
Education
School Voucher Push Taps Frustration Over Distance Learning

ATLANTA (AP) — With her children struggling in many classes last spring, Kelli Rivera became so frustrated with how her suburban Atlanta district was handling the coronavirus pandemic that she withdrew them to home-school them. They're back in public school and mostly attending class in person.... Read More

IAVA Protecting Veterans from Predatory Schools
Veterans
IAVA Protecting Veterans from Predatory Schools
February 22, 2021
by TWN Staff

NEW YORK - The Iraq and Afghanistan Veterans of America kicked off veteran education week this morning, continuing a six-week campaign to highlight the priority issues of its members. Over the course of this week, IAVA is highlighting its advocacy efforts to expand and protect veteran... Read More

How COVID Has Affected Public Opinion on Higher Education
Opinion Polls
How COVID Has Affected Public Opinion on Higher Education
February 17, 2021
by Kate Michael

WASHINGTON — Attitudes toward American colleges and universities may have started evolving before the pandemic set in, but COVID-19 truly upended the higher ed system in ways that are sure to have an impact for years to come.  Through a series of mid-pandemic public opinion research... Read More

Biden Reframes His Goal on Reopening of Elementary Schools
Education
Biden Reframes His Goal on Reopening of Elementary Schools

MILWAUKEE (AP) — President Joe Biden is promising a majority of elementary schools will be open five days a week by the end of his first 100 days in office, restating his goal after his administration came under fire when aides said schools would be considered... Read More

CDC Releases Guidelines for Reopening Schools
In The News
CDC Releases Guidelines for Reopening Schools
February 12, 2021
by TWN Staff

ATLANTA - The Centers for Disease Control and Prevention on Friday released its long-awaited guidance on safely reopening schools, emphasizing that it is"critical for schools to open as safely and as soon as possible." The top recommendations are what one would expect - the universal wearing... Read More

News From The Well
scroll top