WASHINGTON, D.C. – U.S. Senators Cory Booker (D-NJ) and Elizabeth Warren (D-MA) introduced the Ending Administrative Wage Garnishment Act of 2020, legislation that will suspend wage garnishments for those who have defaulted on their student loans and revise income-driven repayment plans.
The COVID-19 crisis has placed millions of Americans at financial risk. According to a recent study by the Pew Research Center, 25% of U.S. adults have either been laid off or someone in their household has, with young adults aged 18-29 being the majority. This economic fallout has largely impacted student loan borrowers and has hit lower-income Americans and communities of color the hardest, further fueling socioeconomic and racial inequalities. Black and brown students also borrow student loans at higher rates, taking on thousands of dollars more in debt due to longstanding disparities in household wealth.
“Even before the public health and economic crisis created by this pandemic, nearly 45 million Americans were burdened by student loans and hundreds of thousands of student loan borrowers were having their wages garnished for past due payments” said Senator Booker. “Suspending wage garnishments for student loan borrowers is a common sense and urgently needed step we can take to help those who are already struggling financially to confront and recover from the economic instability created by this pandemic.”
“Student debt is an anchor dragging down our struggling economy and holding millions back, especially for Black and Brown borrowers. The Department of Education has demonstrated that it cannot handle the immense responsibility of garnishing borrowers’ wages – and that is why Congress should rescind this power and indefinitely halt student debt wage garnishments to bring immediate relief to millions of Americans. We must also broadly cancel student loan debt,” said Senator Warren.
Specifically, the Ending Administrative Wage Garnishment Act of 2020 will do the following:
Earlier this year, Senator Booker and Congresswoman Ayanna Pressley (D-MA) lead 30 of their congressional colleagues in calling out the Trump Administration for continuing to garnish wages of millions of struggling student loan borrowers, despite the CARES Act prohibiting such wage seizures during the coronavirus public health emergency. Senator Booker also wrote a letter to the Federal Reserve of New York early last year regarding disparities in student loan defaults aggregated by demographics.
The full text of the legislation can be viewed here.
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