Borrowers take wage case to court

The U.S. Education Department has continued to garnish wages from workers who are behind on their student loan payments even after Congress ordered the agency to suspend the practice during the coronavirus pandemic, a new lawsuit charges.

The complaint, filed last week in federal court in Washington, alleges that thousands of workers are getting up to 15% of their paychecks held back because the Education Department has failed to notify employers that they must stop withholding pay. It was filed by advocacy groups on behalf of Elizabeth Barber, a home health aide in New York, and others who have lost wages during the crisis.

Barber, 59, said the department has docked her pay multiple times since Congress approved its March 27 rescue package calling for immediate suspension of involuntary collections.

The department says employers have been contacted by phone, email and letters instructing them to stop docking pay.

“Payments we receive via garnished wages will be immediately processed for refund, and the employer will be contacted again to ensure the guidance to stop garnishing wages is understood,” spokeswoman Angela Morabito said in a statement.

Education Secretary Betsy DeVos previously told federal student loan borrowers that garnishments would be halted through Sept. 30, with no action needed on their part. On March 25, DeVos said collections were being paused and workers would be refunded $1.8 billion that had been taken since March 13.

But the suit says DeVos has failed to deliver on her promise.