Advertiser Disclosure

How to Prevent Student Loan Wage Garnishment: Before and After It Begin

Student Loan Wage Garnishment

What does having your student loans garnished mean? Wage garnishment for student loans happens when a collection agency assigned by the DOE or a private loan holder can deduct money directly from your wages to pay off student loans.

This procedure appears to be scary for most student loan borrowers, but there are methods to stop it.

For defaulted federal debts, student loan garnishment permits the Department of Education and its collection agents to deduct 15% of your discretionary income from your paychecks.

Yes, if your federal loan is in default, the federal government can garnish your earnings without a court judgment using an administrative wage garnishment order (at least 9 months past due).

Before they can garnish your earnings or take money out of your bank account, private student loan holders must get a court order. Private lenders are not allowed to seize your earnings only because you failed to make student loan installments. They must first sue you.

How can you stop the garnishment of your student loans? There are six ways to stop a student loan salary garnishment:

National Debt Relief is rated #1 for debt consolidation
  • Settlement
  • Consolidation
  • Loan rehabilitation
  • File bankruptcy
  • Voluntary payments
  • Hardship hearing

A student loan settlement is when you make a lump sum payment to repay your remaining student loan debt. A student debt settlement can prevent or postpone garnishment.

Federal student loan settlements often waive collection costs but will not settle for less than 85% of the loan sum. Private student loan settlements often range between 30 and 70 percent of the existing loan sum.

Contact the debt collector in charge of your loans to find out what your settlement choices are and whether they are ready to accept your lump amount or settlement offer. In most circumstances, you may only settle if your debt is in default.

Private student loans are more inclined to reach a settlement with you since recouping their money without a lawsuit is far more difficult.

Advantages of settlement: If you successfully negotiate a settlement on your defaulted loan, you may be able to save money and begin the process of restoring your credit.


Consolidation is the process of consolidating numerous federal loans into a single Direct Consolidation Loan with a single interest rate and monthly payment. (This is distinct from a refinancing, which combines government and private loans into a single payment.)

You can consolidate defaulted federal debts into a Direct Consolidation Loan before wage garnishment begins. Most defaulted student loans are ineligible for consolidation once the garnishment begins.

Student Loan borrowers may be able to combine Federal Family Education Loans and Federal Perkins Loans even after a garnishment has begun in some situations.

On the Federal Student Aid website,, you may combine your federal loans for free. Whether you have a private loan, you should check the website of your specific lender to see if they provide consolidation alternatives.

Anyone with several college loans should be allowed to consolidate them. A private student loan, on the other hand, cannot be consolidated into a federal loan.

Consolidation benefits: When deciding between debt consolidation and rehabilitation, the major advantage of consolidation is that it swiftly restores your defaulted loans to good standing. The consolidation procedure usually takes around 2-3 months.

Loan rehabilitation

Loan rehabilitation is a one-time-only program that student loan debtors can use to get a federal loan out of default. To rehabilitate a defaulted debt, you must make 9 complete voluntary payments.

Wage garnishment can be stopped before or after the student debt rehabilitation program begins. However, in order for the garnishment to be removed, you must make 5 consecutive monthly payments in addition to the income garnishment.

Check with your loan servicer to determine whether you are qualified. If you’ve already gone through loan rehabilitation, you won’t be able to rehabilitate the same defaulted debt again.

How soon can you be debt free?

You can begin the loan rehabilitation program by contacting the debt collector who is in possession of your defaulted debts.

Benefits of the loan rehabilitation program: You may be able to waive the collection costs that have been imposed to your loan amount and get your debt back into good standing. For several years, the US Department of Education has agreed to forgo collection costs for loans that it owns.

File bankruptcy

Bankruptcy is a legal process that allows you to discharge part or all of your debts. This does not necessarily cover school debt, so you must file bankruptcy strategically if you want to remove your student debts and end salary garnishment.

Filing a chapter 7 or chapter 13 bankruptcy prevents wage garnishment from the day your case is filed. Bankruptcy, on the other hand, does not remove your loans from default. Filing for bankruptcy does not, on its own, allow you to discharge your student loan debt.

Bankruptcy may be filed by almost anybody, but it will damage your credit score and it will keep it that way for 7 years. However, in some circumstances, it may be your best option.

To discharge your student loan debt in bankruptcy, you must initiate a student loan adversary case and demonstrate undue hardship. Don’t be alarmed if that seems complex. Speak with a lawyer.

Advantages of declaring bankruptcy: This can help relieve student loan debt for borrowers who cannot afford a settlement, those who have a disability that prohibits them from working full-time, or those who are unable to get a professional license owing to student loan debt.

Voluntary payments

This approach comprises reaching an arrangement with your loan holder on voluntary payback. In this arrangement, you will — you guessed it — make voluntary payments to prevent garnishment from occurring.

If your delinquent federal loan is turned over to a private collection agency, that agency will usually offer you a voluntary payback plan. If you do not agree to the conditions or do not make the agreed-upon installments, the agency will initiate wage garnishment.

You can prevent wage garnishment from occurring by enrolling in the voluntary repayment plan and completing your first payment before the deadline.

While the arrangement will stop the garnishment, it will not bring your federal loans back into good standing. You must continue to make monthly payments under that payment plan until your loan debt is paid in full.

A voluntary repayment arrangement has the following advantages: It ends your existing or pending garnishment and re-starts your payments on a fresh plan. Voluntary payments, on the other hand, will not get your debt out of default.

Hardship hearing

If the garnishment of your federal student loans is causing you great financial hardship, you can request a hearing to have the garnishment reduced or abolished.

If a planned garnishment might cause you financial hardship, you can protest at any time by completing the Department of Education’s Request for Hearing form.

The request should contain a Financial Disclosure Statement, in which you are asked to provide verification of income and basic living expenditures. Among the costs you may include are:

  • Lease and/or mortgage
  • Monthly bills for all expenses
  • Income tax returns
  • Income from your spouse

Although you can file a hardship objection at any time, the DOE will not review your request until the garnishment has been unpaid for at least 6 months.

However, in exceptional situations, the DOE may give an earlier hearing if you can demonstrate that your financial circumstances have significantly altered since the original garnishment notice. Injury, severe disease (e.g., cancer), or divorce are examples of significant changes.

The advantages of a hardship hearing: include the ability to decrease or terminate a wage garnishment that has already begun, but only after 6 months. Borrowers should usually save this option for last since it takes a long time to acquire a ruling and there’s no assurance it will stop or minimize the garnishment.

What causes garnishment?

Garnishment occurs in several ways depending on the sort of financial assistance you received: To garnish your salary, federal and private loan servicers must take separate paths.

Private lenders must sue you in order to garnish your salary. Before any earnings are garnished, they must get a court order.

Private student loan debtors may be able to avoid a wage garnishment by contacting the judgment creditor and asking if they are willing to settle. If the creditor refuses to compromise, bankruptcy may be your only option to halt the wage garnishment.

Once you’ve defaulted on a loan, federal lenders can take your wages (missed payments for 270 days). An administrative wage garnishment order will be issued to your employer. In the instance of a defaulted loan, they can also use the Treasury Offset Program to withhold your tax returns.

In order to guarantee that you do not have any additional federal loans in default, request that you be moved to the National Student Loan Data System.

COVID-19 and garnishments

As part of the 2020 CARES Act, student loan salary garnishment was prohibited. Yes, the federal wage garnishment has been halted.

For most federal student loans, the federal government has halted income garnishment and other collection actions (such as offset of Social Security benefits and tax refunds). This impacts defaulted debts since the coronavirus/COVID-19 epidemic began in March 2020.

Later, the government expanded same safeguards to commercially owned FFEL Loans.

This does not apply to private student loans; only federal student loans are affected. This forbearance is slated to expire on January 31, 2022, following a one-time extension of the initial September 30, 2021 deadline.

Many debtors are also interested in the possibility of broad student loan forgiveness. The present administration has made no explicit plans on this issue.

Are you facing a garnishment? We can assist you.

If you’re concerned about wage garnishment, it’s time to act. You probably want to cease salary garnishment as soon as possible, get out of student loan default, repair your credit, and investigate your student loan repayment choices once your student loans are in good standing.

We have assisted hundreds of debtors just like you in obtaining actual results.

Call now. We’ll go over all of your alternatives for avoiding or terminating your student loan salary garnishment.