Some with student loan debt will receive temporary relief as workers and businesses struggle to cope with “shelter-in-place” orders that have shuttered storefronts and stoked anxiety for millions who could lose their paychecks during the coronavirus pandemic.
Secretary of Education Betsy Devos on Tuesday shared details of a new directive, which will halt the federal collection of defaulted student loans and wage garnishments over at least the next 60 days and refund $1.8 billion to more than 800,000 borrowers.
“These are difficult times for many Americans & we don’t want to do anything that will make it harder for them to make ends meet or create additional stress,” Devos tweeted. “During this #COVID19 national emergency, I’ve put a stop to all collections actions & wage garnishments for student loan borrowers in default and have asked @usedgov to refund $1.8B to 830,000 borrowers who had wages/tax refunds garnished since March 13.”
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These are difficult times for many Americans & we don’t want to do anything that will make it harder for them to make ends meet or create additional stress.
— Secretary Betsy DeVos (@BetsyDeVosED) March 25, 2020
While the plan primarily focuses on federal borrowers, language was included that suggested private lenders should also cease collections.
“Private collection agencies have been instructed to halt all proactive collection activities, including making phone calls to borrowers and issuing collection letters and billing statements,” read part of the statement.
Congressional lawmakers and 2020 presidential candidate Joe Biden have pushed for varying degrees of student loan forgiveness. Biden called for “a minimum of $10,000” per person of federal loans to be expunged, arguing that young people took the hardest hit from the 2008 financial crisis and should not be punished again for this national emergency.
On March 14, New York Democratic Rep. Alexandria Ocasio-Cortez said there was “no reason for not pausing student loan debt in the US.”
