Education Department still withholding wages from over 50K employees over student debt

close

Video

While most schools remain closed, Montana reopens classrooms for some students

Governor Steve Bullock had said some schools could reopen by May 7th, although it would be for local districts to decide if COVID-19 posed a serious threat to getting students back in the classroom.

Get all the latest news on coronavirus and more delivered daily to your inbox. Sign up here.

More than 50,000 workers who have fallen behind on their student debt are still having a portion of their paycheck withheld, despite a moratorium on the practice during the coronavirus pandemic, a Monday court filing from U.S. Education Department revealed.

The finding was part of a court-ordered update jointly filed by the Education Department and a home health aide leading a class-action lawsuit against the agency. The aide, Elizabeth Barber, said the department has illegally docked her pay multiple times since Congress approved a March 27 rescue package ordering a pause on collections.

FILE: Education Secretary Betsy DeVos pauses as she testifies during a hearing of a House Appropriations Sub-Committee on the fiscal year 2021 budget on Capitol Hill in Washington. (AP)

The department said it is "continuing to endeavor to halt all wage garnishments," and that, as of May 7, about 54,000 workers were still being subject to wage garnishment -- down from 390,000 nearly two months prior.

The lawsuit, filed April 30 in federal court, alleged that thousands of workers were getting up to 15 percent of their paychecks held back because the Education Department had failed to notify employers that they must stop withholding pay.

The complaint cited department estimates saying 285,000 people had their wages garnished between March 13 and March 26.

Federal law authorizes the Education Department to garnish up to 15 percent of workers' paychecks without a court order if they go into default on federal student loan payments. The agency can issue garnishment orders to employers and contracts with private agencies to enforce collection.

COLLEGE STUDENTS FILE LAWSUITS SEEKING REFUND FROM SCHOOLS MOVED ONLINE DURING CORONAVIRUS LOCKDOWNS

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 for any wage garnishments taken since March 13.

Congress ordered the Education Department to pause wage garnishments amid other measures meant to relieve financial pressure on student loan borrowers.

CLICK HERE TO GET THE FOX NEWS APP

The lawsuit asked the court to order that DeVos halt wage garnishment immediately and notify borrowers when it has actually been stopped. It also demands immediate refunds for any pay that has been withheld since March 13, the day President Trump declared a national emergency.

The Associated Press contributed to this report.