Wyden seeks return of garnished tax refunds to student loan borrowers

WASHINGTON (KTVZ) -- Sen. Ron Wyden, D-Ore., has joined a group of his colleagues to call on the Department of Education to return all amounts garnished from the federal tax refunds of student loan borrowers since this year’s filing season began on Jan. 27.

The administration previously announced it would halt all collection activity on certain defaulted federal student loans during the COVID-19 emergency and would retroactively return $1.8 billion that had been garnished from borrowers since March 13.

In their letter Friday to Education Secretary Betsy DeVos, the lawmakers called on the Education Department to extend the collection relief to more borrowers, including those who are more likely to be low-income. Traditionally, low-income taxpayers file their tax returns at the start of the filing season, since they rely on their federal tax returns for essential expenses.

“In light of the COVID-19 pandemic, we are deeply concerned that the economic impact of these offsets could be even more devastating this year unless the money is returned immediately to these borrowers,” the lawmakers wrote. “Accordingly, we respectfully request that the Department return all amounts collected through offset of federal tax refunds for delinquent student loans since January 27 to taxpayer-borrowers.”

In 2019, about $3.2 billion was offset through the Treasury Offset Program (TOP) from low-income borrowers.

Joining Wyden on the letter were Senate Health, Education, Labor, and Pensions (HELP) Committee Ranking Member Patty Murray, D-Wash., House Ways and Means Committee Chairman Richard E. Neal, D-Mass., House Labor Committee Chairman Bobby Scott, D-Va., and House Ways and Means Committee member Congresswoman Linda Sánchez, D-Calif.

A copy of the letter is here.