11,000 student loan borrowers still awaiting payback

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  • The CARES Act prohibits withholding wages of borrowers of federal student loans during a pandemic.
  • But Student Defense, a nonprofit, found that 10,868 borrowers have yet to receive reimbursement for withheld wages.
  • The department said that they simply cannot find them.

Withholding wages or withholding someone’s wages pending debt repayment was forbidden for certain student loan borrowers under the CARES Act for the duration of the pandemic.

But a Freedom of Information Act (FOIA) request revealed that the Department of Education continues to support the salaries of borrowers, and almost 11,000 of them still have not received reimbursements because the department simply cannot find them.

Last week, the Ministry of Education responded to student advocacy aimed at defending student rights. According to the response, as of July 19, the Federal Student Aid Office (FSA) has issued 382,306 borrowers compensation for payments made totaling $ 187 billion, but 10,868 borrowers who are owed reimbursement have not yet received it because the department does not have them. correct addresses in the file.

“The Department of Education illegally took this money from student loan borrowers and they have a duty to figure out how to get it back,” Dan Siebel, general counsel and co-founder of Student Defense, told Insider. “Meanwhile, this shows that the Department does not have a business to resume withholding administrative salaries any time soon.”

The department must notify the employer to stop withholding money from the borrower’s salary, but, according to The Washington Post reported Education Secretary Betsy DeVos was slow to send out these notices last year, leading to the Student Defense filing a lawsuit against DeVos in April 2020 for violating the CARES Act.

Last Month Insider reported that 23 Democrats are worried that borrowers might “pay back” payments without a long-term plan to protect their wages and credit ratings.

In a letter to Education Minister Miguel Cardone, they wrote that although the CARES Act initially suspended the payment of student loans during the pandemic, the Department of Education and Treasury still “improperly allocated and withheld” more than $ 200 million from approximately 390,000 borrowers during that time.

“Even before the 2019 coronavirus (COVID-19) pandemic, the fees on unpaid student loans were disastrous for defaulting borrowers who had their salaries, tax refunds and even social security checks confiscated, in addition to being forced to pay exorbitant fees. … “, – wrote the Democrats.

The Department of Education did not immediately respond to Insider’s request for comment.

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