Top Class Actions’s website and social media posts use affiliate links. If you make a purchase using such links, we may receive a commission, but it will not result in any additional charges to you. Please review our Affiliate Link Disclosure for more information.
A 59-year-old woman has lodged a class action lawsuit against Secretary of Education Elisabeth DeVos and the U.S. Department of Education for allegedly continuing to go after the wages of student loan holders, despite the economic uncertainty faced by millions due to the coronavirus pandemic.
The coronavirus class action lawsuit alleges that the wages of federal student loan holders have been pursued by the department as a part of “unlawful debt collection” during the pandemic that has left many wondering how they will pay for basic necessities, like food and shelter.
The alleged wage garnishment comes despite a March announcement by the Education Department pledging to stop “involuntary collection activity, including wage garnishment” in response to the implications of the coronavirus.
Did your paycheck get deducted to pay for student loans during the global pandemic? Get legal help now.
The coronavirus class action lawsuit also points out that the department previously said, “it would issue refunds of amounts collected since March 13, 2020, the date President Donald Trump declared a national emergency.”
DeVos also stated that wage garnishments had stopped for students and families in default on March 27, 2020, contend the plaintiffs. In addition, the Department of Education allegedly sent notices to borrowers indicating that “all collection activity, including wage garnishments, was stopped for the period of March 13, 2020, through September 30, 2020,” and assured them that there was no action they needed to take on their part.
“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 lead plaintiff, Elizabeth Barber, claims that she is exactly the type of borrower that these promises to stop wage garnishments during the COVID-19 crisis were meant to help.
She says she works as a home health aide for less than $13 an hour. During normal times, alleges Barber, she has trouble paying for basic necessities as well as her debts.
As a result of the COVID-19 epidemic, Barber’s work hours have reportedly been decreased. Barber is not the only one, according to the student loan wage garnishment class action lawsuit. The reduction in work hours, unemployment, and shut down of major swaths of the economy due to coronavirus restrictions have left many student loan borrowers in a financially precarious situation, contends the complaint.
However, despite this hardship and the promises made, DeVos allegedly garnished wages from Barber’s paycheck.
“Decades ago, Congress vested the Department with the extraordinary authority to garnish the wages of individuals who default on their federally issued or guaranteed student loans without a court order,” notes the coronavirus class action lawsuit, adding that, in the fiscal year 2018, the Education Department garnished more than $840 million from workers to pay for federal student loans.
“When a borrower’s delinquency qualifies for garnishment, the Department will issue a garnishment order directly to the borrower’s employer,” explains the complaint. “The Secretary has the right to take legal action against an employer in order to enforce that order.”
When a loan holder’s wages are garnished, the order stays into effect until the debt, along with all interest, penalties, and fees, is paid, or the Secretary of Education rescinds the order.
In addition, if it is determined that a wage garnishment order is “barred by law,” the garnished wages must be “promptly refunded” to the borrower.
The DeVos student loan wage garnishment class action lawsuit points out that the CARES Act halted debt collection actions, including wage garnishment, against borrowers after it was passed by a unanimous vote by Congress on March 27, 2020.
Under the CARES Act, “Congress immediately suspended wage garnishments for a six-month period (more than the sixty days previously announced by the Department) so that struggling student loan borrowers would have more income to put food on the table and pay their rent and medical bills during the crisis,” contends the DeVos class action lawsuit.
Despite the provisions of the CARES Act and additional notifications to borrowers that their wages would not be garnished, loan holders report that the Department of Education continues to skim loan payments off of their paychecks.
The department explained that letters would be sent to the employers of student loan holders instructing them to stop garnishing their paychecks.
Though Devos and the department pledged to act quickly, states the complaint, those letters had not yet gone out, according to a report by the Washington Post.
According to other major news outlets, the problem also lays in the complex network of private debt collection companies the Department of Education relies upon to subject loan holders to wage garnishment and other collection activities.
“What we’re seeing now, is that the student loan collection machine that exists in America literally can’t be responsive to the law,” a representative for the advocacy group Student Borrower Protection Center told CNN.
Though DeVos and the department have said they will refund improperly garnished wages, student loan borrowers and proposed Class Members in the coronavirus class action lawsuit say that seeing this money months from now will not stave off immediate financial ruin.
The lead plaintiff is represented by Daniel A. Zibel, Eric Rothschild, and Alexander S. Elson of the National Student Legal Defense Network and Stuart T. Rossman and Persis Yu of the National Consumer Law Center.
The DeVos Student Loan Wage Garnishment Class Action Lawsuit is Barber, et al. v. DeVos, et al., Case No. 1:20-cv-01137-CJN, in the U.S. District Court for the District of Columbia.
Join a Free Coronavirus Class Action Lawsuit Investigation
If you believe your rights were violated in a way that is directly related to the coronavirus pandemic, you may qualify to join this coronavirus class action lawsuit investigation.
ATTORNEY ADVERTISING
Top Class Actions is a Proud Member of the American Bar Association
LEGAL INFORMATION IS NOT LEGAL ADVICE
Top Class Actions Legal Statement
©2008 – 2024 Top Class Actions® LLC
Various Trademarks held by their respective owners
This website is not intended for viewing or usage by European Union citizens.
