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Ajayi v. Ecmc

United States District Court, D. Maryland

October 3, 2017

ECMC, Defendant.


          Ellen L. Hollander, United States District Judge.

         Volrose Marcia Ajayi, the self-represented plaintiff, filed suit against defendant “ECMC, ” more properly known as Educational Credit Management Corporation. ECMC is a not-for-profit loan guaranty agency in the Federal Family Education Loan Program (“FFELP”), [1]and provides guarantor services to the U.S. Department of Education. ECF 17 at 1 n.1. Plaintiff seeks to bar ECMC's garnishment of her wages, caused by her default on a student loan that she obtained in 2002 from Sallie Mae. ECF 1 (Complaint); ECF 13 at 2. The garnishment went into effect on July 13, 2016. ECF 10-4.

         Plaintiff claims, in various submissions, that Sallie Mae-not ECMC-is the proper holder of her debt, and therefore ECMC may not collect it. ECF 13 at 2. Further, plaintiff alleges that ECMC began garnishing her wages without providing her with proper notice and in contravention of the regulation prohibiting garnishment if the debtor has not been employed for at least twelve months. Id. at 4. And, she asserts that the garnishment is not lawful because it causes plaintiff and her family undue hardship, in that she is “the sole breadwinner” of the family, which includes both a disabled child and a disabled spouse. ECF 1; ECF 13. According to plaintiff, defendant has violated 20 U.S.C. § 1095a and 34 C.F.R. § 682.410. ECF 1 at 4.

         On January 6, 2017, the same date that plaintiff filed suit, she also filed a “Motion of Objection to Garnishment of My Wages by ECMC, Collection Agency.” ECF 4. Defendant responded (ECF 15), and plaintiff replied. ECF 16. By Order of June 15, 2017 (ECF 22), I determined to construe ECF 4 as a supplement to the Complaint (“Supplement”), rather than a motion.

         ECMC was served on February 27, 2017. ECF 9. On March 22, 2017, ECMC moved to dismiss the suit or, in the alternative, for summary judgment, on the ground that plaintiff has failed to exhaust her administrative remedies. ECF 10. The motion is supported by a memorandum (ECF 10-1) (collectively, “Motion”) and exhibits. Plaintiff opposes the Motion. ECF 13 (“Opposition”). Defendant has replied. ECF 19.

         On March 24, plaintiff filed a “Motion to Award Relief and Punitive Damage[s] Against ECMC, Collection Agency” (ECF 12, “Motion to Award Relief”). Apparently, the Motion to Award Relief was mailed before plaintiff was aware of the filing of the Motion. In ECF 12, plaintiff seems to request an entry of default against defendant, with additional allegations. Defendant opposes the Motion to Award Relief. ECF 17. Thereafter, plaintiff filed a “Motion to Strike Out 'Motion to Dismiss' Filed by ECMC with the Court.” ECF 14 (“Motion to Strike”). ECMC opposes the Motion to Strike (ECF 18), and plaintiff replied. ECF 20.

         No hearing is necessary to resolve the motions. See Local Rule 105.6. For the reasons that follow, I shall grant the Motion and deny the Motion to Award Relief and the Motion to Strike.

         I. The Statute and Regulations

         When a student loan borrower fails to repay a debt, and the U.S. Department of Education assumes the liability for that debt, 20 U.S.C. § 1095a allows the Department of Education or an authorized “guaranty agency”[2] to garnish the pay of a borrower if the borrower does not have a repayment plan, provided that the garnishment complies with a number of requirements. In particular, (1) the amount deducted per pay period may not exceed 15 percent of disposable pay; (2) the borrower must be given notice at least 30 days before the garnishment begins; (3) the borrower must be allowed to inspect and copy records related to the debt; (4) the borrower must be allowed to enter a payment plan; (5) the borrower is entitled to a hearing concerning the amount, existence, and terms of the debt; (6) the guaranty agency may sue an employer for non-compliance; (7) the borrower must have been employed for 12 months before garnishment may begin or resume; and (8) an employer may not terminate a borrower because the borrower's wages are garnished. 20 U.S.C. § 1095a(a)(1)-(8).

         As indicated, the borrower is entitled to a hearing to challenge the existence, amount, or terms of the debt. Id. § 1095a(a)(5). A borrower must request a hearing in writing. Id. § 1095a(b); 34 C.F.R. § 682.410(9)(i)(E)(2). If the borrower does so, the guaranty agency is required to provide a hearing in time to enable a final decision within 60 days of the borrower's request. 34 C.F.R. § 682.410(9)(i)(F).

         The hearing official, who presides over the hearing, is appointed by the guaranty agency from which the borrower seeks relief. Id. § 682.410(9)(i)(I). The hearing official may be “any qualified individual, including an administrative law judge.” Id. However, the regulation cautions that “[u]nder no circumstance may the hearing official be under the supervision or control of the head of the guaranty agency, ” although “[p]ayment of compensation by the guaranty agency . . . does not constitute impermissible supervision or control . . . .” Id.

         At the hearing, the borrower may object to, inter alia, the garnishment of her wages, if the amount or rate of garnishment would cause financial hardship to the borrower and the borrower's dependents. Id. § 682.410(9)(i)(F)(2).

         Neither the statute nor the regulation expressly provides for appeal or judicial review as to the hearing official's final decision.

         II. Plaintiffs Allegations

         Plaintiff is pro se. Therefore, I must construe her pleadings liberally. See Erickson v. Pardus, 551 U.S. 89, 94 (2007). As noted, the Complaint alleges that defendant failed to follow the requirements of 20 U.S.C. § 1095a and 34 C.F.R. § 682.410 by unlawfully garnishing plaintiff s wages. ECF 1 at 4.

         In support of her position, plaintiff avers that the garnishment causes her family substantial hardship. Id. at 5, 6. Further, plaintiff alleges that ECMC has “no judgement [sic] from any court authorizing the garnishment.” Id. at 6. As relief, plaintiff seeks immediate termination of the garnishment and a refund of wages that were already garnished. ECF 1 at 8.

         In her Supplement, plaintiff realleges that the garnishment has caused hardship to her family, and she contends that defendant has “not followed or obeyed” a number of provisions of 20 U.S.C. § 1095a. ECF 4 at 1. In her Opposition, plaintiff alleges that ECMC violated several provisions of the statute: defendant failed to provide plaintiff with 30 days' notice in advance of the garnishment, or notice of plaintiffs rights (ECF 13 at 3), in violation of 20 U.S.C. § 1095a(a)(2)[3]; plaintiffs wages were garnished without the opportunity for a hearing (ECF 12 at 3-4), in violation of ...

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