Department of Education provides Covid-19 relief by pausing loan collections, issuing refunds

Federal Issues Department of Education Student Lending Student Loan Servicer Debt Collection Covid-19

On March 25, U.S. Secretary of Education Betsy DeVos announced that in order to provide additional relief for student loan borrowers, the Department will take a number of actions which include the following:

• Stop collection activities and wage garnishments for at least 60 days, effective March 13;
• Stop requests to the Department of Treasury to withhold funds from “defaulted borrowers' federal income tax refunds, Social Security payments, and other federal payments”;
• Refund almost $2 billion to over 830,000 borrowers from funds previously withheld as of March 13;
• Direct private collection agencies to “halt all proactive collection activities, including making phone calls to borrowers and issuing collection letters and billing statements,” however, “[p]rivate collection agencies are permitted to provide assistance upon the borrower's request”;
• Begin to “monitor employers' compliance with the request to stop wage garnishment.” Those “[b]orrowers whose wages continue to be garnished after March 13 should contact their employers' human resources department.”

Borrowers with defaulted loans who would like to “continu[e] a prior payment arrangement, consolidat[e] their loans, or begin[] a loan rehabilitation arrangement with their private collection agency, should contact the Department's Default Resolution Group at 1-800-621-3115 (TTY for the deaf or hearing-impaired 1-877-825-9923).”

For more information, borrowers may visit StudentAid.gov/coronavirus.