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

May 4, 2020 by Tom Ramstack
Student Advocates Sue Education Dept. for Wage Garnishments in Loan Defaults
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.

A+
a-
  • Betsy DeVos
  • Department of Education
  • Education
  • loan defaults
  • Student loans
  • In The News

    Health

    Voting

    Education

    February 20, 2024
    by Tom Ramstack
    Supreme Court Lets Virginia High School Keep ‘Race Neutral’ Admissions Policy

    ALEXANDRIA, Va. — The U.S. Supreme Court decided Tuesday to allow a Virginia high school to choose its own racially... Read More

    ALEXANDRIA, Va. — The U.S. Supreme Court decided Tuesday to allow a Virginia high school to choose its own racially influenced admissions policy rather than intervening at the request of Asian American students. The elite Thomas Jefferson High School for Science and Technology in Alexandria adopted... Read More

    Cough? Sore Throat? More Schools Suggest Mildly Sick Kids Attend Anyway

    Trenace Dorsey-Hollins’ 5-year-old daughter was sick a lot last year. Dorsey-Hollins followed school guidelines and kept her home when she... Read More

    Trenace Dorsey-Hollins’ 5-year-old daughter was sick a lot last year. Dorsey-Hollins followed school guidelines and kept her home when she had a cough or a sore throat — or worse — until she was completely better. Near the end of the year, the school in Fort... Read More

    January 29, 2024
    by Dan McCue
    CMS Announces $50M in Grants for School-Based Health Services for Children

    WASHINGTON — The Centers for Medicare & Medicaid Services announced $50 million in grants for states to connect millions more... Read More

    WASHINGTON — The Centers for Medicare & Medicaid Services announced $50 million in grants for states to connect millions more children to critical health care services, particularly for mental health, at school.  Made possible by the Bipartisan Safer Communities Act, the grants will provide 20 states... Read More

    Some Americans Will Get Their Student Loans Canceled in February as Biden Accelerates New Plan

    WASHINGTON (AP) — The Biden administration will start canceling student loans for some borrowers in February as part of a new... Read More

    WASHINGTON (AP) — The Biden administration will start canceling student loans for some borrowers in February as part of a new repayment plan that's taking effect nearly six months ahead of schedule. Loan forgiveness was originally set to begin in July under the new SAVE repayment plan, but... Read More

    January 8, 2024
    by Dan McCue
    EPA Awards Nearly $1B in Clean School Bus Program Grants

    WASHINGTON — The Environmental Protection Agency on Monday announced that it will award nearly $1 billion to 67 applicants as... Read More

    WASHINGTON — The Environmental Protection Agency on Monday announced that it will award nearly $1 billion to 67 applicants as a result of its very first clean school bus program grant competition. The agency said the awards will enable the selected applicants to purchase more than... Read More

    Ohio’s GOP Governor Vetoes Ban on Gender-Affirming Care and Transgender Athletes in Girls' Sports

    COLUMBUS, Ohio (AP) — Republican Ohio Gov. Mike DeWine vetoed a measure Friday that would have banned gender-affirming care for minors, casting... Read More

    COLUMBUS, Ohio (AP) — Republican Ohio Gov. Mike DeWine vetoed a measure Friday that would have banned gender-affirming care for minors, casting the action out of step with many in his own party as thoughtful, limited and “pro-life.” He simultaneously announced plans to move to administratively ban transgender... Read More

    News From The Well
    scroll top