Student Loan Wage Garnishment

Student Loan Wage Garnishment

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Federal laws give the Department of Education the right to garnish after-tax income up to 15%. It will be dependent upon what you are currently earning and cannot be put into effect if your earnings are below 30 times the minimum wage (Federal). As of this year a borrower is allowed $217.50 to be exempt from garnishment. Those earning less than this amount would be completely exempt from federal student loan garnishment.

The Federal Government has the right to garnish your bank accounts, wages, tax refunds and any property you own, without receiving a judgment from the court before doing so.

Notice of Garnishment

Typically, the Department of Education will notify you with a letter stating that administrative wage garnishment is about to begin. When you receive the letter, you will only have a short about of time to request a hearing and contest the garnishment. The Department of education may hold an oral hearing or may simply hold an internal hearing and decide whether or not to move forward with garnishment. At this time, you should really seek to rehabilitate or consolidate your loans and get them out of default.

How to Stop a Garnishment of Student Loans

Once started, a student loan garnishment is difficult to stop.  One way to stop the garnishment is to apply and get approved for a student loan consolidation.  Another option is to rehabilitate your loans through a student loan rehabilitation program.  However, when you make your rehabilitation payments, they will typically have to be in addition to the amount that is already being garnished.

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