A new class-action lawsuit is claiming that Education Secretary Betsy DeVos failed to halt the collection of defaulted federal student loans from worker paychecks. The usual practice involves garnishing the wages of loan-holders to upkeep the timeliness of their payments. Elizabeth Barber from upstate New York is the chief plaintiff in the lawsuit. She is suing on behalf of roughly 285,000 borrowers whose wages are being garnished despite when on March 27, President Trump signed off on the CARES Act, the $2 trillion economic relief bill which also aimed to suspend wage garnishing through September 30 of this year. At 59 years old, Barber was working as a home-aide for $12.89 an hour when she discovered that as recently as this month, her wages have been garnished despite the pandemic and the government’s shift in policy.
The lawsuit comes three days following a letter written by Cory Booker (D-NJ) and Ayanna Pressley (D-MA), among over 30 other congress members. The letter addressed to DeVos and Treasury Secretary Steven Mnuchin, outlined the contradiction of procedural norms. “On March 27, 2020, the CARES Act was passed into law prohibiting these wage garnishments for the next six months in an effort to protect vulnerable borrowers from even more financial ruin during this crisis,” the congressional letter testifies. “Congress took a bold step in the CARES Act to ensure that struggling student loan borrowers facing AWG (Administrative Wage Garnishment) would not be left behind during COVID-19 relief efforts… Despite these statutory requirements, the department and its contracted private collection agencies, appear to be moving forward in blatant disregard to these new protections established by Congress.”
“This is simply unconscionable… Congress passed the CARES Act in an effort to provide immediate relief to our most vulnerable workers and families.” It is true that this governmental oversight has emboldened student advocacy groups and indebted students alike. “This Administration’s actions and disregard for these new protections under federal law will place workers and families in further economic jeopardy.”
Angela Morabito, the spokesperson for the Department of Education, did not comment on the ongoing lawsuit but did emphasize reality, “the Department’s default loan servicer called employers by phone… and mailed letters to employers who could not be reached any other way.” Morabito acknowledged that borrowers had been subject to unwarranted deductions. “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.” However, the Department of Education has not produced any timeline for the refunds. The spokesperson concluded, “The Department relies on employers to stop garnishing wages, but is taking every measure to contact employers and refund garnished wages to borrowers until September 30, 2020.”
The lawsuit was filed in D.C. federal court on April 30 by Student Defense and the National Consumer Law Center. Behind them is the Student Borrower Protection Center. There is no clear future for students and employers on the subject of wage garnishing. The Department of Education is actively making adjustments to right the wrong, despite the fact that there are no preliminary measures to ensure that wages aren’t garnished again. Time will tell how the lawsuit develops. The U.S. government is in a reactionary stage which can only be held accountable by the commonly shared interests of its people.
