11K People Still Waiting on Student Loan Refunds

The Education Department revealed that approximately 11,000 people are still waiting on their respective student loan refunds. The news comes around five months after the federal government released a moratorium on collecting defaulted student loans since March 2020, states The Washington Post.

Forbes reports that the United States Department of Education released the said information regarding student loan refunds in response to a Freedom of Information Act request. The request was made by Student Request, a nonprofit organization that seeks to protect students’ rights, states Business Insider.

According to Forbes, the Department of Education is reportedly having a challenging time sending out the refunds primarily because the wages of these borrowers were garnished in order for them to qualify for loans in the first place.

People Still Waiting on Student Loan Refunds

Prior to this, a CARES Act was signed into law in March 2020 by Congress. The CARES Act is a $2.2 trillion stimulus package aimed at providing loan relief to borrowers. Forbes detailed the parameters of this act, which included providing borrowers with 0% interest on federal student loans, no mandatory federal student loan payments, as well as no collection of student loan debt in default.

The CARES Act also prohibited wage garnishment, as well as withholding wages until a debt is paid off, throughout the virus pandemic in the country. Despite this, Forbes revealed that the Education Department continued on with such practices despite having been signed into law last year.

In a statement to Business Insider, chief counsel and Student Defense organization co-founder Dan Zibel said, “The Department of Education illegally took this money from student loan borrowers, and it’s their responsibility to figure out how to return it.”

“In the meantime, this shows that the Department has no business restarting administrative wage garnishment anytime soon,” continued Zibel.

As of writing, the U.S. Department of Education has now worked through providing refunds for around 382,306 student loan borrowers, with a total amount of $187 million issued in refunds. Around 10,868 are still waiting due to a lack of valid address, said The Washington Times.