But the proposed class action lawsuit claims the Education Department has not actually ended the practice and continues to garnish wages in violation of the CARES Act. He quotes a History of the Washington Post however, the ministry had not sent formal letters telling employers to stop withholding money from borrowers’ paychecks on behalf of the government.
The ministry estimated that some 285,000 people had their wages seized between March 13 and March 26, according to The Post.
Education Ministry spokeswoman Angela Morabito declined to comment directly on the ongoing litigation, but said the ministry “has taken immediate action to advise employers to stop garnishing wages.”
“The ministry’s default loan manager called employers by phone, sent emails when possible, and sent letters to employers who couldn’t be contacted otherwise,” Morabito said in a statement. “Payments that we receive through foreclosed wages will be immediately processed for reimbursement, and the employer will be contacted again to ensure that guidelines for stopping wage garnishment are understood. and reimburse the wages seized to the borrowers until September 30, 2020. “
Department officials have previously said they plan to reimburse all salaries seized by the government since March 13, when Trump declared a national emergency due to the coronavirus pandemic. But the agency has not provided any timeline for when all of these repayments will take place.
Consumer groups who have taken legal action against DeVos on behalf of the borrowers say the education ministry’s response has been woefully inadequate. The lawsuit has been filed in DC federal court by the Student Defense and National Consumer Law Center, and is supported by the Student Borrower Protection Center.
“Paying off the money in several months is not acceptable,” said Persis Yu, who heads the National Consumer Law Center’s student loan aid project. “We’re in a national crisis right now, and borrowers need this money right now, and Congress has passed a law that says borrowers should keep this money right now.”
Yu said borrowers facing payday garnishment are already among the most vulnerable – even before the economic collapse caused by the pandemic.
“These are borrowers who were already in distress on their loans,” she said. “They are the ones who hold the sack with the inability of the ministry to do this, whatever the intentions of the ministry.”
Alex Elson, senior attorney at Student Defense, said DeVos broke her promise to end wage garnishments in March. “The truth is, she continues to take wages out of the paychecks of Americans struggling to make ends meet,” he said in a statement. “We are continuing to get her to stop.
The plaintiff in the lawsuit, Elizabeth Barber, 59, who lives in the Rochester area, defaulted on about $ 10,000 in federal student loans in December, according to the complaint. She earns around $ 12.89 an hour and earned around $ 20,000 in 2019.
Since January, the government has seized 12% of each of Barber’s paychecks, adding to his financial pressure. She has seen a reduction in her weekly schedule as a home help from 10 to 15 hours per week due to the pandemic, according to the lawsuit.
“Funds that the ministry illegally seized are critical to Ms Barber’s ability to meet her essential financial obligations during the pandemic,” the complaint says, noting that she is struggling to pay for her housing as well as her water bills. and electricity.
Barber’s salary was last seized on April 24, according to the complaint, which also says “the garnishment order remains in effect” for his employer to seize part of his income and send it to the government .
The lawsuit comes after a group of Democrats, led by Rep. Ayanna Pressley (D-Mass.) And Sen. Cory Booker (DN.J.), said last month they feared the Department of Education did not fully comply with the obligation to stop the wage garnishment. “It is simply unacceptable”, they wrote in a April 16 letter to DeVos.
The Education Department said at the time that, through its loan service, it had asked employers of more than 135,000 borrowers to stop garnishing wages – and planned to send letters to other employers. “If the ministry receives funds from a garnishment between March 13, 2020 and September 30, 2020, the ministry will reimburse – and has already started to reimburse – those wages seized,” the spokesperson said at the time. of the ministry, Angela Morabito.
Ministry officials also ordered debt collection agencies under contract with the government to stop garnishing wages in March, but the process is complicated by the fact that the government is relying on employers to withdraw money from checks. payroll. The Education Ministry has already claimed in court that it has no mechanism to force employers to stop garnishing wages after ordering them to start doing so.
“This raises greater concerns about the wage garnishment process in general,” said Yu, attorney for the National Consumer Law Center. “What does it mean that the government has this really amazing tool to seize wages and they can’t turn it off?”