This report investigates the federal government’s harmful failure to manage its student debt collection apparatus during the COVID-19 pandemic. Collections Catastrophe reveals that the Department of Education (ED) may be powerless to implement protections for defaulted borrowers as required by law, and that it struggled to end illegal garnishments during COVID for far longer and in much more profound ways than previously known. It also shows that ED explicitly chose not to shield expanded COVID-related unemployment checks from student loan repayment—thereby likely ushering tens of thousands of borrowers into default.
In light of their findings, experts are calling on ED to discontinue the use of administrative wage garnishment—a tool it is not required to use—unless and only until ED can be sure that the collection system can operate within the law.
Read the Report: Collections Catastrophe: New Evidence Exposes Fundamental Failures of the Government’s Student Loan Collection Machine
Read the Press Release: Uncovered Documents Expose the Government’s Stunning Failure to Control its Student Loan Collection Machine During the COVID Pandemic
The full set of ED records underlying this report is available here.
To learn more about the SBPC’s work related to student loan collections, click here.