Department of Education announcement - Guaranty agency collections to stop

On 3/30, the Department of Education announced an expansion of the pause to student loan interest and collection of all defaulted loans in the Federal Family Education Loan (FFEL) Program.

What this means

The DOE has directed guaranty agencies to cease all collection activities, return collected funds to the borrower and set the loan interest to 0%, retroactive to 3/13/2020 through 9/30/2021.

What you should do now

Based on the Department of Education’s announcement, you may wish to consider:

• Stopping any restarted guaranty agency wage garnishments within your system.

• Not setting up any new guaranty agency orders you may receive.

• Refunding any guaranty agency-related funds you receive to the employee.

What we’re doing now

• Any guaranty agency payments you may send will be returned to you with a reversal code: 110 – COVID – 19 Release Order, for refund to the borrower.

• Any funds ADP receives from guaranty agencies will be returned to you, which should then be refunded to the employee.

What’s next

We will continue to monitor this matter and send you additional communication should any new actions or updates become available.

Have questions? We’re here to help! Contact your dedicated Payroll Service Representative with any additional questions.

Published 4/7/2021WGPS