DeVos Directs FSA to Stop Wage Garnishment, Collections Actions for Student Loan Borrowers

U.S. Secretary of Education (DOE) Betsy DeVos has announced that, due to the coronavirus (COVID-19) national emergency, the DOE will halt collection actions and wage garnishments to provide additional assistance to borrowers for a period of at least 60 days from March 13, 2020.

Per DeVos’ directive, the DOE has stopped all requests to the U.S. Treasury to withhold money from defaulted borrowers’ federal income tax refunds, Social Security payments, and other federal payments. Such withholdings, known as “Treasury offsets,” are permitted by federal law and applied toward repayment of defaulted federal student loans. At the same time, the Secretary directed the Department to refund approximately $1.8 billion in offsets to more than 830,000 borrowers. The Department expects the number of borrowers who will benefit from this relief to increase as services work through additional offsets already submitted at the time of the announcement.

The notice adds that the DOE must rely on employers to make the change to borrowers’ paychecks, so it will monitor employers’ compliance with the request to stop wage garnishment. Borrowers whose wages continue to be garnished after March 13 should contact their employers’ human resources department.