Education Dept. sued for seizing paychecks for student loan debt during pandemic
The Department of Education is continuing to garnish people’s wages for student loan debts during the coronavirus pandemic, according to a lawsuit filed Friday.
Lawyers for the National Student Legal Defense Network filed the class action lawsuit, saying the department continues to seize wages even through the recent coronavirus relief package passed by Congress stopped all student loan collections until Sept. 30.
The lawsuit names both the department and Education Secretary Betsy DeVos as defendants. Under normal circumstances, the department can issue an order to garnish up to 15% of someone’s wages if they default on their student loans.
A spokesperson said the department “does not comment on pending litigation.” But, the Department of Education spokesperson said it was up to employers to stop garnishing wages.
“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. Payments we receive via garnished wages will be immediately processed for refund,” the spokesperson said.
The lead plaintiff in the class action, Elizabeth Barber, is 59 and makes $12.89 per hour as a home health aid, according to the lawsuit. “She is exactly who the CARES Act was designed to help,” the lawsuit says, referencing the Coronavirus Aid, Relief, and Economic Security Act aid package.
“Ms. Barber struggles to afford daily necessities while also paying off her debts. During the pandemic, her hours have been reduced, placing her under even more financial strain. The CARES Act’s reprieve from wage garnishment was supposed to help her get by — immediately,” according to the suit.
“I am so worried about how I will get through this,” Barber said in a news release from the National Consumer Law Center, lawyers from which helped in bringing the lawsuit. “I have no money in the bank. I need every dollar I earn at work to survive each day, but my hours have been cut because of the virus. I don’t understand why the government keeps taking my money away after it passed a law that says they will stop.”
“With the President at her side, Secretary DeVos promised in March that she had stopped federal wage garnishments altogether, which is what the CARES Act requires,” Alex Elson, senior counsel at Student Defense and one of the lawyers representing Barber, said in a statement. “The truth is, she keeps on taking wages from the paychecks of Americans struggling to make ends meet. We sued to make her stop.”
On March 25, DeVos said the department was going to stop collections on student loan debt for at least 60 days.
“These are difficult times for many Americans, and we don’t want to do anything that will make it harder for them to make ends meet or create additional stress,” she said in a statement. “Americans counting on their tax refund or Social Security check to make ends meet during this national emergency should receive those funds, and our actions today will make sure they do.”
President Donald Trump signed the CARES Act on March 27, which stopped federal student loan interest, payments and collections until the end of September.
This story was originally published May 1, 2020 at 11:11 AM with the headline "Education Dept. sued for seizing paychecks for student loan debt during pandemic."
