Garnishment of defaulted federal student loans halted under CARES Act
News
Friday, April 17, 2020

Garnishment of defaulted federal student loans halted under CARES Act

By Payroll and Entitlements Editorial Staff

The Coronavirus Aid, Relief, and Economic Security Act (P.L. 116-136) (CARES Act), signed into law on March 27, 2020, provides temporary relief for federal student loan borrowers. Not only are payments on student loans that are held by the Department of Education suspended, but all involuntary collection has been suspended during the period in which the Secretary suspends payments on a loan, including wage garnishments.

According to a release from the Department of Education, "The Department must rely on employers to make the change to borrowers' paychecks, so [the Department] 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 Federal Student Aid office further clarified that the Department of Education will send a letter to human resources departments instructing them to stop wage garnishments for defaulted student loans. If the Department receives funds from a garnishment between March 13, 2020, and Sept. 30, 2020, the garnished wages will be refunded.

Back to Top

Interested in submitting an article?

Submit your information to us today!

Learn More