The Washington PostDemocracy Dies in Darkness

Thousands of student loan borrowers are still waiting for refunds of their garnished wages

STOCK IMAGE: A man overwhelmed with past-due bills and debt. (iStock)

There are 10,868 people still awaiting refunds of their garnished wages, despite a federal moratorium on the collection of defaulted student loans that has been in place since March 2020, according to data released by the Education Department this week.

The Education Department is dragging its feet on stopping wage garnishment for student loan borrowers

Advocacy groups have criticized the department’s management of an unwieldy system for recouping past-due student debt. Tens of thousands of borrowers continued to have their paychecks shorted or await the return of their seized pay months after the Trump administration imposed the moratorium, which Congress codified in the first stimulus package.

While the department has made progress, a Freedom of Information Act request made by the D.C.-based nonprofit National Student Legal Defense Network revealed many Americans have not received their entitled refunds. In a response to the request dated Aug. 17, the Education Department said it has not been able to issue refunds to nearly 11,000 borrowers because their addresses are invalid.

There are several steps involved in ending involuntary collection. Employers must be notified by the department to stop withholding money from the borrower’s paycheck. It can then take employers weeks to fully process and cease collection.

Throughout the moratorium, the department said it has called and emailed employers to stop garnishing wages, but some have continued. When employers fail to act, the department has promised to quickly refund any money it receives. According to the information request, the department has returned $187 million to 382,306 borrowers through the end of July.

The Education Department, which did not immediately provide comment, had previously said it was reaching out to borrowers asking them to update their information and working with Treasury to validate mailing addresses through a data match. All the same, the never-ending effort to turn off the collection apparatus shows it is deeply flawed, advocates say.

“A year and a half into the COVID-19 pandemic, we are still seeing a broken wage garnishment system with thousands of student borrowers who have not received refunds of wages that were seized in violation of the CARES Act,” Aaron Ament, president of the National Student Legal Defense Network, wrote in an email.

Borrowers sue Education Secretary Betsy DeVos for garnishing wages after Congress ordered halt

The Legal Defense Network represented a group of borrowers who sued the Trump administration in May 2020 for mismanaging the federal order. Filings in that case showed the extent to which the bureaucracy of the collections process left some 54,000 people in the throes of wage garnishment well after the Congressional order.

From the outset of the order, the Trump administration was slow to notify employers. The Washington Post previously reported that the department failed to send formal letters to employers. The agency initially sent emails, most of which remained unopened, according to people familiar with the matter who were not authorized to speak publicly. They questioned why the agency failed to deploy all methods of communication from the beginning.

The pandemic’s impact on education

The latest: Updated coronavirus booster shots are now available for children as young as 5. To date, more than 10.5 million children have lost one or both parents or caregivers during the coronavirus pandemic.

In the classroom: Amid a teacher shortage, states desperate to fill teaching jobs have relaxed job requirements as staffing crises rise in many schools. American students’ test scores have even plummeted to levels unseen for decades. One D.C. school is using COVID relief funds to target students on the verge of failure.

Higher education: College and university enrollment is nowhere near pandemic level, experts worry. ACT and SAT testing have rebounded modestly since the massive disruptions early in the coronavirus pandemic, and many colleges are also easing mask rules.

DMV news: Most of Prince George’s students are scoring below grade level on district tests. D.C. Public School’s new reading curriculum is designed to help improve literacy among the city’s youngest readers.