On March 25, 2020, U.S. Secretary of Education Betsy DeVos announced that, due to the COVID-19 outbreak, the Department will stop collection actions and wage garnishments related to federal student loans for at least 60 days starting (retroactively) on March 13, 2020. Under the Education Department’s directive, private collection agencies must cease all proactive collection activities, including making phone calls to borrowers, and issuing collection letters and billing statements.
The Department has also stopped all requests to the U.S. Treasury to withhold money from defaulted borrowers' federal income tax refunds, Social Security payments, and other federal payments (known as "Treasury offsets"). Be aware that to stop the wage garnishments, employers have to adjust borrowers’ paychecks. So, if your employer continues to garnish your wages after March 13, you should contact the human resources department where you work.
In addition, DeVos directed the Department to refund approximately $1.8 billion in offsets to more than 830,000 borrowers, which were in the process of being withheld as of March 13, 2020.
Effective Date: March 13, 2020