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Education Department Announces Relief for Student Loan Borrowers

BY: Curtis E. Tatum, Esq. | 03/26/20

The U.S. Department of Education (ED) has announced relief for student loan borrowers in light of the COVID-19 national emergency [News Release, 3-25-20]. The Secretary of Education announced that ED will “halt collection actions and wage garnishments to provide additional assistance to borrowers.” The relief also includes an automatic reduction of the interest rate to 0% for federal student loans and allows borrowers to suspend their payments. The relief is effective for a 60-day period beginning March 13, 2020.

ED Halts Garnishments

The ED said it “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.”

The ED created a webpage that includes questions and answers about the forms of relief available to federal student loan borrowers. Two questions pertain to borrowers who are subject to wage garnishments.

Q: On March 25, 2020, ED announced that my wages would not be garnished, but money is still being taken from my paycheck. What should I do?

A: If your wages continue to be garnished after the president’s March 13, 2020, announcement, you should contact your employer’s human resources department. If ED receives funds from your paycheck that should have been stopped as a result of the March 13 announcement, we will refund your garnished wages.

Q: What will happen after the 60-day period related to stopped wage garnishments and Treasury offsets?

A: ED is actively monitoring the COVID-19 national emergency and may extend the 60-day period. After the 60-day period ends, your loan servicer will communicate information to you about resuming your payments. The message may be emailed or posted to your online account.

For loans that were subject to wage garnishments and Treasury offsets, you will be notified when those payments resume.

As more information about this and other relief becomes available, APA’s Compliance Hot Topic webpage on COVID-19 will be updated with APA News articles and in-depth analysis of new legislative and regulatory requirements from Payroll Currently.

To learn more about federal and state laws, regulations, and information to keep your company's payroll operations in compliance, check out Payroll Source Plus!


Curtis E. Tatum, Esq., is Director of Federal Payroll Compliance for the APA.