Student Loan Payments Allegedly Still Being Taken From Paychecks Despite Pandemic Suspension

U.S. Secretary of Education Betsy DeVos is being sued for allegedly seizing the paychecks of student loan borrowers during the coronavirus pandemic, despite the protections guaranteed to them by the CARES Act. The COVID-19 relief bill guaranteed that all debt collection on defaulted federal student loans be halted during this crisis, yet the lawsuit claims that DeVos has knowingly allowed collections to continue, according to a report by Forbes.

The lawsuit against DeVos was filed on Friday in a federal court in Washington, D.C. It represents borrowers with federal student loans — all of which should be protected from collection right now because of the coronavirus pandemic. However, these plaintiffs say that debt collectors are still coming after them and even seizing their wages. So far, the Education Department has not responded to the lawsuit.

Borrowers are protected under the language of the CARES Act — the latest coronavirus response bill passed by the federal government. It mandated that federal student loans are suspended, interest rates on federal student loans are set to 0 percent, and no collections on defaulted federal student loans is to be pursued.

Even without these protections, plaintiffs say that these collections are unfair. The lead plaintiff, Elizabeth Barber, said that she makes $12.36 per hour as a home health aide, and that her hours have been greatly reduced due to the pandemic. She said that she was juggling overdue utility bills and unpaid taxes with her student loans when the Education Department suddenly garnished her wages, even though she thought she was protected.

According to Forbes, Barber and the other plaintiffs will be entitled to a refund of the amount garnished after March 13 at the very least. The director of National Consumer Law Center's Student Loan Borrower Assistance Project, Persis Yu, agreed.

"Right now, low-wage workers hit hardest by the economic impact of the pandemic need their paychecks to keep food on the table and a roof over their heads. By continuing to use its harsh collection tools during this public health and economic crisis, the Department of Education is placing the health, safety, and well-being of vulnerable student loan borrowers in peril," Yu said.

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The measures protecting student loan borrowers put in place by the CARES Act will remain in effect until Sept. 30, though some expect there to be an extension. Borrowers who continue making monthly payments on their loans will be paying into the principal amount due.

For the latest information on the coronavirus pandemic, visit the websites of the CDC and the World Health Organization.