Home Coronavirus Coverage Borrowers are still having their paychecks seized over defaulted student loans, even though the CARES Act was supposed to stop wage garnishment, lawsuit says – MarketWatch

Borrowers are still having their paychecks seized over defaulted student loans, even though the CARES Act was supposed to stop wage garnishment, lawsuit says – MarketWatch

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In court filings, the Department of Education says it has ‘no further responsibility’ to stop the wage garnishment.

More than 2,800 borrowers are having their paychecks garnished over defaulted student loans, even though the CARES Act was supposed to pause student debt payments and collections starting in March.

That’s according to the latest filings in a lawsuit accusing Secretary of Education Betsy DeVos and her agency of violating the CARES Act, the coronavirus relief package Congress passed in March. The law suspended payments and collections on some federal student loans until September 30.

About one month after President Trump signed the CARES Act into law, Elizabeth Barber, a borrower who was still having her wages garnished, filed the class-action lawsuit. The case was filed on behalf of Barber and similarly situated borrowers by attorneys at the National Student Legal Defense Fund, an organization founded by former Obama administration officials that represents student-loan borrowers and for-profit college students in litigation, and the National Consumer Law Center, a nonprofit focused on consumer issues, particularly as they affect low-income people.

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