Steve Mnuchin and Betsy DeVos sued for unlawful seizure of student loan borrowers’ tax refunds during pandemic

Treasury Secretary Steven Mnuchin, Education Secretary Betsy DeVos, and the federal departments they run were hit with a class-action lawsuit Friday for illegal seizures of thousands of student borrowers’ tax refunds during the coronavirus pandemic, which has left over 40 million Americans jobless and familes across the country struggling to stay in their homes and keep food on the table.

The suit (pdf)—filed by Student Defense and Democracy Forward in the U.S. District Court for D.C.—accuses the Education and Treasury departments of violating the Coronavirus Aid, Relief, and Economic Security Act (CARES) Act from late March, which halted all involuntary collection of federal student loans, including tax refund offsets, until the end of September.

“Secretaries DeVos and Mnuchin have inflicted needless financial pain on student borrowers and their families by failing to stop the illegal seizures of their tax refunds,” Democracy Forward senior counsel Jeffrey Dubner said in a statement. Continue reading.