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Lawsuit alleges the federal government is illegally garnishing taxation refunds of student-loan borrowers

July 26, 2020

Lawsuit alleges the federal government is illegally garnishing taxation refunds of student-loan borrowers

Published: 23, 2019 7:31 a. M june. ET

The federal government is accused of unlawfully gathering on student education loans held by defrauded borrowers

JillianBerman

The government has been taking pains to collect on Tamara Blanchette’s student loans — garnishing some of the money she receives through her tax refund for the past few years.

Nonetheless it’s debt the federal government shouldn’t be collecting on into the place that is first a brand brand new lawsuit alleges.

The suit, filed with respect to Blanchette and similarly situated borrowers, alleges that Betsy DeVos therefore the Department of Education are gathering on financial obligation that isn’t lawfully enforceable.

That’s as the Department understands that Blanchette along with other pupils whom signed up for the criminal-justice system in the Minnesota class of company, a now defunct for-profit college string, had been defrauded because of the college once they enrolled in this system, in accordance with court papers.

The suit, filed on the part of Blanchette and likewise situated borrowers, alleges that Betsy DeVos and also the Department of Education are gathering on financial obligation that isn’t lawfully enforceable.

Borrowers who had been defrauded by their schools have actually the ability to have their financial obligation discharged.

“There’s this set of pupils that the Department of Education is aware of who have been defrauded, ” said Robyn Bitner, counsel in the nationwide scholar Legal Defense Network, that is representing Blanchette. “Despite knowing about them being defrauded, the Department has chose to gather on it. ”

The Department of Education declined to discuss pending litigation. A lawyer representing Minnesota class of company didn’t instantly react to an ask for touch upon the allegations.

The suit may be the latest to shine a light regarding the government’s extraordinary capabilities to gather pupil financial obligation — including garnishing borrowers’ wages, taxation refunds and Social safety checks — plus the trouble borrowers face mitigating those abilities, even if they will have a right to do this. (more…)