Betsy Devos Sued For Seizing Wages During Pandemic, Despite Trump’s Signature Forbidding The Practice
The CARES Act (standing for Coronavirus Aid, Relief, and Economic Security) President Trump signed in March was written to offer protection to Americans during a time of economic difficulty. One aspect of that was a suspension of student loan payments. Now U.S. Secretary of Education Betsy DeVos is facing a lawsuit, after debtors found their wages being seized for student loans, despite this promise.
The Consumer Financial Protection Bureau, a government agency that oversees banks, debt collection, and other lending and financial services, issued guidance March 27th for those holding student loans. Trump had just signed the CARES act, and the Bureau offered a plan-spoken explanation of what the legislation means for student loan debt.
In part, the agency assured debtors that payments on federally held student loans would be suspended through the end of September, that interest on those would be suspended for the same time period, and that a debtor would not need to contact the holder of their loan to enable this protection, but that it would be automatic.
Betsy Devos responded to the CARES Act in March, promising the student loan relief required in the legislation.
Since the start of this outbreak, @usedgov has provided higher ed institutions the flexibility they needed to take learning online. We also acted on @POTUS’s promise to provide student loan relief to tens of millions of borrowers. pic.twitter.com/5pIUi5xEuJ
— Secretary Betsy DeVos (@BetsyDeVosED) March 31, 2020
However, according to Politico, a lawsuit filed April 30th alleges that more than 285 thousand workers have had wages garnished for federal student loan payments since the legislation was signed.
Debtors hit by the garnishment, during a period of time when the pandemic is already causing financial strain, say that DeVos’ Department of Education failed to appropriately notify employers of the change, causing garnishments to continue. The Department has responded to the allegations, saying they will refund any payments received through wage garnishment and will make efforts to contact employers and stop further garnishments from taking place.