Summary
The Trump administration faced accusations of wrongly taking tax refunds from people with student loans. More than a dozen lawmakers wrote to the Education Secretary, arguing that taking these refunds without proper notice violated federal rules. The issue affects many borrowers, as the lack of notification limits their ability to contest the actions.
Key Facts
- The federal government paused collecting tax refunds and Social Security benefits from student loan borrowers during the COVID-19 pandemic but resumed these collections in April 2021.
- Lawmakers, including Representatives Jamie Raskin and Frank Pallone, claim these collections occurred without the required notice.
- Federal law requires the Department of Education to give at least 65 days’ notice before taking a tax refund or Social Security benefit for student loan debt.
- Up to 10 million borrowers who defaulted on their loans could lose tax refunds or benefits due to these actions.
- There are concerns that a single notice, if outdated, can cause borrowers to miss the chance to contest the collection.
- The American Federation of Teachers has filed legal actions over other student loan issues, claiming delays in loan forgiveness programs.
- The number of Americans with federal student debt is nearly 43 million, with a record delinquency rate over 20%.
- Additional policy changes during the Trump administration limited access to student loan relief programs.
