How to Stop Garnishment on Student Loans

Bills.com Team
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Highlights


  • Contact the Dept. of Education to prevent wage garnishment.
  • Consider filing a Chapter 13, which results in a court supervised repayment plan.
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State and Federal Laws May Help You Stop a Student Loan Wage Garnishment.

The options available to stop or reduce a student loan-related wage garnishment depend on what kind of loan and where you live. The rules are different for federal student loans, such as Perkins, Stafford,  and PLUS loans, and for private student loans. 

Federal Student Loan Garnishment

Federal law allows the Department of Education to garnish 15% of a delinquent borrower’s after tax income for federally insured student loans (34 C.F.R. Part 34-Administrative Wage Garnishment). It may do so as long as the garnishment does not bring the borrower’s weekly pay below 30 times the Federal minimum wage. Currently, you are guaranteed that $217.50 ($7.25/hour × 30 hours) per week is exempt from garnishment. (These numbers are current as of early 2014.)

If you make less than that amount each week, then your wages are exempt from garnishment altogether. Unlike other creditors, the federal government has the right to garnish wages, levy bank accounts, and seize property without first obtaining a court judgment against the debtor (31 USC Chapter 37, Subchapter II). Federal agencies may intercept your tax refund, which is called “offset” (26 U.S.C. § 6402(d) and 31 U.S.C. § 3720A). You also can have your income tax refund taken to pay down your student loan debt.

Keep in mind that no matter where you live, if your loans are federally insured, you can usually be garnished 15% of your disposable wages, regardless of your state laws regarding garnishment for other types of debts.

If you can prove to the Dept. of Education that its garnishment of your wages is causing your family an undue financial hardship, it may be willing to stop the garnishment and work with you in establishing alternate repayment terms. For example, facing foreclosure of your home as a result of garnishment should qualify as an undue hardship.

To try to stop an administrative garnishment, contact the Department of Education’s resource Facing Loan Default. The DOE provides a list of resources available for consumers who have defaulted on their loans. Another good resource to explore is the Student Loan Borrower Assistance Project’s (SLBAP) Administrative Wage Garnishments.

If your federal student loan payments are causing financial distress, review the Income-Based Repayment (IBR) program, and see the Dept. of Education’s IBR calculator. If you do not qualify for IBR, learn if Income Contingent Repayment is right for you.

If you defaulted on your federal loans and want to restart payments, see the Dept. of Education’s Loan Rehabilitation page.

Quick Tip

Check the Dept. of Education’s National Student Loan Data System (NSLDS) to see if the loan is federal. State statutes of limitations do not apply to federal loans, and are subject to collection indefinitely. Student loans not backed by federal grants or guarantees do not appear in the NSLDS, and are therefore private. Private student loans are subject to state statutes of limitations for breach of contract.

Private Student Loan Garnishment

Private student loans, on the other hand, are basically the same as any other unsecured personal loan; the only major difference between private student loans and regular personal loans is that the former are generally non-dischargeable in bankruptcy.

Quick Tip

Need a student loan? See the Bills.com resource Student Loans resource page. Problem with a student loan? Learn more about Student Loan Consolidation.

Private lenders must file a lawsuit against the borrower and obtain a judgment before they can garnish wages, so it takes private lenders longer to begin a garnishment. A judgment will appear in the "Public Records" area of your credit report.

Quick Tip

Concerned about what is appearing on your credit report now? Check your credit report today and get a free credit score instantly.

Depending on where you live, private lenders with a judgment may garnish as much as 25% of the your after-tax wages (15 U.S.C. 1673). However, the amount that can be garnished is specific to each state. See the Bills.com resource Collection Laws & Exemptions by State to determine how much of your pay can be garnished by private lenders. Texas and Pennsylvania, for example, do not allow wage garnishment for unsecured debts such as private student loans.

To try to stop a garnishment resulting from a private loan, you should contact the creditor to discuss your financial situation and try to negotiate an alternate payment plan. Unfortunately, the creditor may not be willing to stop the garnishment voluntarily, forcing you to explore alternative options.

Quick Tip

Some debt settlement companies are now accepting private student loan debt. Get a free consultation with a Bills.com pre-screened debt relief provider, if you are struggling to pay your private student loans.

Bankruptcy and Student loans

The last option most people consider to prevent garnishment for student loans is filing for bankruptcy protection. since student loans generally cannot be discharged in a chapter 7 filing, you would probably need to file a chapter 13 bankruptcy, which is a court supervised repayment plan in which your student loans, as well as other debts, would be repaid through monthly payments made to the court.

Chapter 13 can be an expensive and long-term commitment (5 years, typically), but if you feel it may be an option to stop your wage garnishment, consult with a bankruptcy attorney in your area to learn if bankruptcy will help improve your financial outlook. Surprisingly, some find their monthly payments under a chapter 13 are more than the amount they would have been garnished had they done nothing, so if you are considering bankruptcy, please make sure to discuss it in detail with an attorney to determine if it is the right choice for you.

Filing a chapter 13 bankruptcy may bring your mortgage current, stop a foreclosure, and allow you to pay now-delinquent payments over the course of your bankruptcy plan. To learn more about your bankruptcy options, visit the Bills.com bankruptcy information & resources page.

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  • 35x35
    May, 2013
    Marcos
    I'm a medically disabled American citizen, living in the Philippines. Federal Student Aid (US Dept of Education's Default Resolutions Group) has started garnishing my SSDI (April & May 2013). Their databases refuses to store my Philippine address. My SSDI income is less than $850/month and they're garnishing $27 each month. When I was still living in the USA (pre-2007), I told their collectors to SUE ME, but they never did. I told them that because a magistrate (in Federal Courthouse) told me if the Student Loan Association sues me and I'm jobless, disabled and on welfare, the federal judge would discharge my debt. One lawyer sent me a letter, threatening to sue me, but never did; when I called that lawyer, he told me that I'm not worth suing (no assets). When I was still in the USA, I told the collectors to SUE ME in a Federal Courthouse to get it over with, and to send me a city bus ticket to travel to the Federal Courthouse, as well as a meal ticket so I don't have to go to the food bank. The NEVER sent me a subpoena! I've kept checking with the Federal Courthouse in my jurisdiction and they kept telling me no cases have been filed against me. My Student Loan debt went from collector to collector, even after I moved to Philippines. The collectors got me USA-based VoIP number and kept calling me, demanding me to start paying back my student loan NOW. The harassing calls kept going and going to the point I had to discontinue my VoIP service. My student loan debt went from $4,000 to over $11,000 by 2010. Garnishment began on my April 2013's SSDI payment. Twice, I called their Resolution Group. The first time, I convinced them to send me the necessary documents and they promised to put a hold on the next garnishment. Three weeks later, I received the documents and called them back. They told me they already did another garnishment. For both calls, I got very, very, very upset. They have now ENTRAPPED me. No doctor in Philippines can legally sign the discharge papers! (They also feel their USA-based relatives will be harassed by US Dept of Education!) Additionally, I can't fill out the "Social Security Offset Hardship Package" without self-incriminating myself. My wife (Philippine citizen) is AFRAID that they will garnish her income, too. I have not filed her US Visa paperwork! Putting her name on the forms may threaten her employment, and omitting her name info is one of the ways I might self-incriminate myself. I'm writting this comment, because I'm hopelessly deadlocked. I got NOBODY to turn to for help. I'm now thinking of dropping my US Citizenship; if Federal Student Aid garnishes EVERYTHING, then I got no other choice than to drop my US Citizenship (that's cheaper than they emotional pain they're causing me).
    0 Votes

    • 35x35
      May, 2013
      Bill
      You mentioned you qualify for Social Security Disability benefits. The Social Security Administration's definition of disabled is different from the Dept. of Education's definition. It is possible for a person to receive SSD benefits and not meet the requirements to have their federal student loans cancelled. Visit the Dept. of Education's Forgiveness, Cancellation, and Discharge to learn what steps you must take to apply for loan cancellation.

      You mentioned your spouse's liability for your student loan debt. You also mentioned you reside in the Philippines. I have no experience with Philippine law, so I cannot comment whether your spouse has any liability for your student loan or other debts.

      Consult with a Philippine lawyer who has experience with consumer law or civil litigation to learn if your medical condition qualifies you for a discharge of your student loan debt in bankruptcy. Your lawyer will also answer your questions about your spouse's liability for your debts. Finally, he or she will advise you if renouncing US citizenship will make it more difficult for the Dept. of Education to offset your Social Security benefit.
      0 Votes

  • 35x35
    May, 2013
    denise
    I am being garnished on a $1,200 student loan from 1986. They did not try to collect until 2011. How much interest can they collect before it's considered paid? Can it be settled for less?
    0 Votes

    • 35x35
      May, 2013
      Bill
      Is the student loan federal or private?
      • Federal: Congress gave the Dept. of Education the ability to, on its own authority, order your employer to garnish up to 15% of your disposable earnings. There is no statute of limitations on a federal student loan, for all intents and purposes.
      • Private: The law treats private student loans as the same as any other unsecured debt, such as delinquent credit card or medical debt. Before a private student lender can garnish your wages, it must file a lawsuit against you, win, and then ask the court to give it a judgment. The judgment allows the private student lender to garnish your wages, levy your bank accounts, and place liens on property titled in your name. Because private student loans are treated like any other unsecured loan by state courts, your loan is subject to your state's statute of limitations rules.
      • I discussed these two points because you mentioned your loan was from 1986. It's unclear when you last made a payment on this loan. Assuming the loan is private, your first action should be to consult with a lawyer in your state who has civil litigation experience. Ask him or her if the lender followed your state's civil procedure rules when it filed the lawsuit against you, and when it started the wage garnishment. Most state courts follow wage garnishment rules narrowly, and if the lender took any short-cuts along the way the court may order the garnishment stopped.

        Assuming the Dept. of Education or the private lender followed the letter of the law, the garnishment will continue until the debt is paid in full. That means the garnishment order covers the entire debt, and not just the interest portion of the debt.

        A settlement for less than the entire amount due is possible in theory. However, in your situation here, what incentive does the lender have to agree to a lump-sum settlement for less than the full balance due when its successful garnishment will result in 100% repayment, plus fees and interest? The only situation I can imagine where a lender might agree to such a settlement is where the borrower has a low income, and the amount garnished each pay period is low. This would result in a long time to repayment. Let's say the borrower then receives a windfall. The borrower could open a negotiation and say something like, "At the rate we are going here with this garnishment, I will not pay the amount due in 5 years (or whatever). Let us settle this once and for all for 40 cents on the dollar today."

      0 Votes

  • 35x35
    Apr, 2013
    Otitam
    I'm being garnished by 2 student loans and they're both taking 15% each. That's 30% of my NET WAGES! It's KILLING ME. They said I have to show THEM, not a judge, that I can't live with this much being taken. Why would they allow lower payments if they have guaranteed garnishments? There has to be something I can do. The check I have doesn't even cover rent. 30% is unbearable
    0 Votes

    • 35x35
      Apr, 2013
      Bill
      Consult with a lawyer who has consumer law experience immediately. You did not mention whether your wage garnishments are for federal or private loans.

      For federal loans, the Dept. of Education is permitted to use administrative wage garnishment to require your employer to withhold up to 15% of your disposable income. If your loans are federal, your employer should withhold a maximum of 15% of your disposable wages from your paycheck, and not 30% as you described.

      For private student loans, the creditors or their collection agents must follow your state's wage garnishment rules. The creditor/collection agent must file a lawsuit against you, win, and then obtain a judgment from the court. With the judgment in hand, it may then ask the court to garnish your wages. The maximum amount that may be garnished under federal law is 25% of your disposable income. Some states have lower limits. Here, if your student loans are private, the court is violating federal law by allowing more than 25% of your disposable income to be garnished.

      If you have a mixture of private and federal loans, the Dept. of Education can garnish 15% of your wages, which allows the private lender to grab 10%. The only instance where the 25% limit can be exceeded is for cases of delinquent child support. See the Bills.com wage garnishment article to learn more.

      Collection agents have one job — collect money. Do not believe the legal advice from collection agents because it may be incorrect, misleading, incomplete, or presented in a manner that does not serve your best interests. Which brings me back to my original point — see a lawyer now. If you cannot afford one, call your county bar association and ask for the names of the organizations that provide no-cost legal services to people in your area with no and low income. Make an appointment with one of these organizations, and bring all of the documents you have regarding the student loans and garnishment to your meeting. The lawyer you meet will help you straighten out this mess.
      0 Votes

  • 35x35
    Mar, 2013
    Kevin
    Between my garnishment and paying my federal & state taxes & Social Security, they are taking over 35% of my pay.
    0 Votes

    • 35x35
      Mar, 2013
      Bill
      You may be misinterpreting the rule, if I infer your question correctly. Federal garnishment law refers to a person's disposable income. Neither state or federal income taxes, or FICA are considered garnishments. See the Bills.com wage garnishment page to learn more about the Consumer Credit Protection Act, which sets the general wage garnishment rules. Ask any follow-up questions you may have here or on that page.
      0 Votes

  • 35x35
    Jan, 2013
    Dave
    I have $100,000 in private student loans from three companies (AES, Chase, and Great Lakes). I have tried to call and work with them but have had no such luck. I can no longer afford their ridiculous monthly requests so I am looking for any and all suggestions moving forward. I can not seem to find if Ohio is one of the states that bans wage garnishment. This has gotten out of hand in this country with private loan company and students. They should be willing to work with you when you are trying to be an honest person and pay them back. I never once said I wasnt going to pay but I have come upon a hardship and am just looking for a way to work through it. They took advantage of me while I was in school not really knowing how much I needed and just signing the papers now they wont help. Sorry for the rant but I know I am not the only one in this situation!
    1 Votes

    • 35x35
      Jan, 2013
      Bill
      You are 100% correct that you're not the only one in this situation. It is unfortunate that there are so many people suffering from student loan debt and inflexible creditors.

      Ohio allows wage garnishments for private student loans. You can have 25% of your disposable income garnished in Ohio, as well as suffer a bank levy, if your creditors obtain a judgment against you.

      I suggest that you seek a free consultation with a bankruptcy attorney. He or she can advise you whether a payment the court would order in a Chapter 13 bankruptcy would be more or less than the amount that can be garnished from your income.

      I suggest you contact your state and federal elected representatives. If everyone in your situation raised their voices, perhaps the problem would get more attention.
      1 Votes

  • 35x35
    Jan, 2013
    Brad
    I recently received a call from a Texas law firm that stated they were going to file a lawsuit over some old private student loans. I'm already being garnished from one federal loan, and I'm currently in a rehabilitation program on another federal student loan. I recently found stable employment and have gotten back on my feet. The loans I had taken out over the past years were for school expenses and family expenses due to my father's unexpected passing during my sophomore year in college. My mother is also disabled and has had two spinal surgery's since my father's passing.

    I have a couple of questions:
    1. Would these circumstances warrant or grant me due hardship on these loans and get them dismissed?
    2. The lawsuit regarding the private loans will effect my grandmother, who was a co-signer and only receives Social Security. Can they garnish her benefit checks or seize her property?

    I live in Texas.

    0 Votes

    • 35x35
      Jan, 2013
      Bill
      You mentioned you reside in Texas. Start with the Bills.com resource Texas Collection Laws to get a basic understanding of Texas law. On to your questions:
      1. The rules for discharge of a student loan in bankruptcy court have some wiggle room for argument and application to individual circumstances. However, given you are able to work and recently found employment, I doubt a court would find you meet the criteria for a discharge. That said, consult with a Texas lawyer who has bankruptcy experience for an in-depth analysis of your situation. There may be facts you didn't disclose that might tip the scale towards a discharge.
      2. Read the Bills.com article May a Creditor Garnish Social Security Benefits? to learn why a judgment-creditor may not garnish or offset Social Security benefits. As you read in the first link I mentioned, Texas Collection Laws, it is possible for a judgment-creditor to place a lien on a judgment-debtor's real property, or in some cases seize their property with a writ a replevin.

      Ask any follow-up questions you may have on the appropriate page.

      0 Votes

  • 35x35
    Nov, 2012
    Taniqua
    Hello I have a TG loan texas guaranteed loan and they stated they sent papers to my employer on monday for 15% which will cause me not to afford my bills. I called them and they are unwilling to give me alternative or tell me there are any. What are my options?
    0 Votes

    • 35x35
      Nov, 2012
      Bill
      According to the Texas TG Web site, "If you do not voluntarily make arrangements to pay back your student loan(s), money to repay your debt could be deducted directly from your paycheck, without your consent. Federal regulations require guarantors, like TG, to collect payment on a student loan debt through a deduction from a borrower's wages, known as Administrative Wage Garnishment."

      "You could have up to 15 percent of your disposable income garnished, or withheld, from your paycheck each pay period to make payments on your student loan debt. If you have multiple loans held by multiple guarantors or the Department of Education (ED), you could have up to 25 percent of your disposable income garnished."

      "By law, you have certain rights when you are facing Administrative Wage Garnishment, including:
      • "You can inspect and copy records relating to your debt.
      • "You can establish a repayment plan if an Order of Withholding from Earnings has not been issued.
      • "You can request a hearing.
      • "An employer may not fire you, refuse to employ you, or discipline you because your wages are garnished."

      Consult with a bankruptcy attorney to learn if your income is low enough a court would not allow as much of your pay to go to paying the student loan debt as the garnishment will take.

      1 Votes

  • 35x35
    Nov, 2012
    Leah
    Can the government garnish your wages and take your tax return at the same time for student loans owed?
    0 Votes

    • 35x35
      Nov, 2012
      Bill
      There is no either/or I find in the law for student loan-related administrative wage garnishment (31 USC Chapter 37, Subchapter II) or for income tax return offset (26 U.S.C. § 6402(d) and 31 U.S.C. § 3720A). In other words, the Dept. of Education is not barred from both garnishing wages and intercepting the federal income tax refund check of a delinquent federal student loan borrower.
      0 Votes

  • 35x35
    Oct, 2012
    Dan
    I have about $65,000 (sixty-five thousand) in *private* student loans. I also have credit card and other debt, and my attorney wants me to file a chapter 7 and then an adversarial proceeding to fight one of my private loans in particular (he thinks it does not meet the bankruptcy exemption because it was a non-school certified loan where they basically gave me as much $$ as I asked for and was WELL above "qualified educational expenses." Still, I wonder if filing a 13 might be better -- my attorney again said that when a 13 is over everything included in it is discharged; would this apply to private student loans as well? Or would they be ready and waiting to continue to ruin my life once again, once the 13 is over?
    0 Votes

    • 35x35
      Oct, 2012
      Bill
      Dan, I yield to what your attorney advised. Your attorney has a much fuller view of the facts in your case than I. I do believe that your private student loan obligations would remain after the Chapter 13 completes. If you aren't confident you're receiving accurate or complete legal counsel, seek a second opinion. It could be useful to learn if another attorney feels some of your student loans could be discharged in a Chapter 7 successfully.
      0 Votes

  • 35x35
    Oct, 2012
    Adam
    I'm not sure if what kind of loans I have...I had several (I remember Sallie Mae was one of them) which I then consolidated. I was on deferment but now that I'm off I can't make the payments. I know about wage garnishment and withholding income tax return but will they do both? And how does the wage garnishment work when paying child support to two different states? I live in Texas.
    0 Votes

    • 35x35
      Oct, 2012
      Bill
      You wrote, "I'm not sure if what kind of loans I have." Review the original article above and look for the Quick Tip discussing the NSLDS and how borrowers can learn if their loans are federal or private.

      General Wage Garnishment & Student Loans
      If your delinquent loans are private, state wage garnishment rules apply. For an original creditor or collection agent to garnish your wages, it would need to file a lawsuit in state court, and assuming you mount an ineffective defense, the court would grant it a judgment. The judgment-creditor would then be able to ask for a wage garnishment (if allowed in your state), account levy, and property lien. You mentioned you reside in Texas. Texas collection law does not allow a judgment-creditor to garnish a Texas resident's wages. Wage garnishment is allowed for other reasons, such as child or spousal support.

      If the loans are federal, then the Dept. of Education can garnish up to 15% of a person's wages administratively. Residents of all US jurisdictions are subject to this rule, regardless of their state's laws on wage garnishment. The Dept. of Education (and other federal agencies) may intercept your federal tax return. This is called "offset." The Dept. of Education may garnish wages and offset a tax return simultaneously — it doing one does not preclude the other.

      Support Wage Garnishment & Student Loans
      You mentioned existing wage garnishments for support. I will assume these garnishments equal or exceed 25% of your disposable income. If your delinquent loans are private, and the original creditor or collection agent obtains a judgment, it may not use the judgment to garnish your wages for two reasons: First, you are a Texas resident, and wage garnishment is not allowed for judgment-creditors. Second, the federal limit on wage garnishment is 25% of your disposable income. If your support garnishments are already "using up" 25% or more of your disposable income, then a judgment-creditor will need to stand in line until your support garnishments have concluded. As mentioned judgment-creditors can use account levy and property liens even though wage garnishment is not allowed for Texas residents.

      If your loans are federal, the Dept. of Education may garnish 15% of your disposable income under the Debt Collection Improvement Act of 1996. However, as discussed in my October 4, 2012 answer to reader A.M. below, Congress set the amount employers may garnish at a maximum of 25%, with three exceptions (15 U.S.C. 1673). The Dept. of Education does not fit one of those exceptions. If your loans are federal, the Dept. of Education must wait in line until you satisfy your present support garnishment(s). The Dept. of Education need not wait in line to levy your financial accounts or place a lien on your property. Therefore, if your loans are federal, talk to your loan servicers now about the ways you can avoid default through a payment plan.
      0 Votes

  • 35x35
    Oct, 2012
    A
    Federal loans can be garnished at 15% of my wages and private loans can be garnished up to 25%, right? My wife and I have private loans and federal loans (total is about $300,000). Can they garnish 40% of my wages? Do they also take money out of our bank account?
    0 Votes

    • 35x35
      Oct, 2012
      Bill
      The federal limit on wage garnishment is 25%, which is specified in 15 U.S.C. 1673. The limit does not apply to:
      1. Court- or administrative-ordered support for a person
      2. Chapter 13 bankruptcy wage deduction payments
      3. Federal or state tax collection

      The 25% rule can be exceeded with child or family support. But the Dept. of Education is not a person, so the first exception to the 25% rule does not apply to student loans. Nor is it a tax, so the third exception does not apply either. Read the statute and the Dept. of Labor's Wages and Hours Worked: Wage Garnishment page for a more complete explanation of the law.

      You asked about account levy. If a creditor , including a student loan lender or its collection agent, files a breach of contract action in a state court and the borrower does not mount an effective defense, the court will grant the creditor a judgment. The judgment-creditor can use the judgment to garnish wages (if your state law allows it), levy accounts, or file a lien on the judgment-debtor's property.

      Therefore, the answer to your question about account levy is "yes" but the lender must take expensive, time-consuming steps first.

      0 Votes

  • 35x35
    Sep, 2012
    C
    My pay is currently being garnished because of a defaulted student loan. I have recently filed chapter 7 bankruptcy, although I know my student loan will not be discharged I wanted to know if the garnishment will cease while I'm going through the bankruptcy, since all garnishments should stop...does this include the student loan garnishment?
    0 Votes

    • 35x35
      Sep, 2012
      Bill
      Yes, the Dept. of Education is subject to the stay on wage garnishment when a debtor files bankruptcy.

      However, creditors have the option to ask the bankruptcy court to lift the stay. Depending on the circumstances, the court may do so. Therefore, you should consider a bankruptcy stay a pause, and not a full stop, to making your monthly student loan payments.
      0 Votes

  • 35x35
    Aug, 2012
    Todd
    Like most college grads, I have loan debt of $85,000. That's eighty five thousand dollars. Thus I decided to move to Canada to void all of this annoying debt. The US Dept. of Education can't cross international borders, besides what has the US government done for me lately? It sure hasn't provided a decent job like we were all promised once we got our four-year degree, right?
    2 Votes

    • 35x35
      Aug, 2012
      Bill
      Of new college graduates today who have student loan debt, the average amount is considerably less than $85,000. However, your point is taken, and the amount of student loan debt is growing. If the upward trend continues it is possible the average may reach the amount you borrowed.

      The Dept. of Education itself may not cross the international borders, but it is certainly possible for a collection agent working on behalf of the Dept. of Education to file a civil lawsuit against you in a US state court, and then seek to domesticate the debt in Canada. The likelihood of it doing so is remote, but what I described is possible legally.

      Depending on your degree, and your willingness to work in a rural area, a Canadian province may welcome your immigration application. See the Citizenship and Immigration Canada page Come to Canada to learn more about the steps you must take to live and work in Canada legally.
      0 Votes

  • 35x35
    Jun, 2012
    Stephen
    Had a house fire one year and a half ago. In 2013 of January I have a court date for a jury trial to force the insurance to pay out on their most premium policy they had on the house. Start Garnishment this month so now I can't pay the court expert so instead of having the student paid off next year they may never get paid off. You know.... You can't fix stupid - especially with student loan officers.
    0 Votes

  • 35x35
    Jun, 2012
    Jostin
    I have started the rehabilitation process on my student loans. I was assured that the garnishment would stop after 3 consecutive payments on my debt. My third payment was in march. I have contacted the company almost every week since and they continue to tell me that the stop garnishment form will be or has been sent. I have also kept in touch with my HR department and they have never recieved any form for the stop garnishment. I need help getting this taken care of.
    0 Votes

    • 35x35
      Jun, 2012
      Bill
      I can understand how frustrating it must be, to receive such vague and contradictory information. You should be able to get a clear answer as to whether or not the form was or was not sent. Have you tried providing the loan company your HR department's fax number? You can keep calling the loan compnay and ask to speak with a supervisior or maybe have your HR department reach out to them directly.
      0 Votes

  • 35x35
    May, 2012
    CARI
    I had a federal student loan in default & have been making payments since Jan 2012, the last 3 months an additional payment has been taken from my SSDI check. When I call the treasury offset number it says I have 3 offsets (last week it changed because it ALSo said 1 debt but now doesn't) Dept of Ed nor Treasury nor collection agency seems to give me any help. I want to file income taxes to GET refund... Does it just take along time for Offset # to update I am in the clear? ...so lost
    0 Votes

    • 35x35
      May, 2012
      Bill
      Contact the Dept. of Education's Federal Student Aid Ombudsman Group about your issue to learn if your Social Security Disability payment should be offset.
      0 Votes

  • 35x35
    Mar, 2012
    Melissa
    I came across your website while doing an internet search involving offset of my tax refund by mistake and am wondering what I can do. In 2010, my 2009 taxes were offset because of a defaulted student loan. I was never notified in advance. I contacted the Department of Education in April 2011 who set up a payment plan for me and informed me that if I made 9 consecutive payments, my loan would be rehabilitated and then my taxes would no longer be offset. I was expecting a large return in 2010 and put off filing until my loan was rehabbed. From April - September 2011, I received monthly bills from the DOE that I paid on-time. I did not receive bills in Oct, Nov & Dec and called each month and made my payment. I was told at that time that the DOE was having system issues and bills were not sent out. I made my final payment on 12/6/2011 and was informed at that time that it would take approx 30 days for my loan to be rehabbed and to call back and check at the beginning of January. I called on January 4th and was informed that my loan had in fact been rehabbed. I was told that the offset had been removed and it would be safe to file my taxes. I was given an automated number to call to check as well. I was also told that I no longer had to make any payment to the DOE and I would receive information from Direct Loans in about a month. I filed my 2010 taxes on 1/4/12 and RECEIVED my refund from the IRS on 2/3/12. On 2/28, I received a bill from the DOE for $250 that was PAST DUE. I was confused by this as I was told I no longer was to make payments to them and the amount made no sense. I called the DOE on 3/5 and was told they were still having issues with their system and they were sending out erroneous bills by mistake and I could ignore it. I also confirmed again that my loan was rehabbed and I was told to expect information from Direct Loans, but it would be delayed because of issues they were having. On 3/5, I once again called the 1-800 number to make sure again that my taxes would not be offset, and there was no offset on my account. I then filed my 2011 taxes. My tax refund was to be deposited into my bank account on 3/14, but it did not happen. I was told by the IRS, that it was deposited and could take a few days for my bank to receive it. While waiting, I was received a letter in the mail from the IRS on 3/17 telling me that my refund had been offset and was sent to the DOE. I called many times on 3/17 and again on 3/19 to try to get some answers, but the DOE told me "Sorry nothing we can do" and hung up on me. I finally got through to a supervisor on 3/19 and was told by her that my loan in fact had never been rehabbed and she didn't know why I was told by SEVERAL different employees that it was. She even had notes in my account that she could see that stated that their employees in fact did tell me the wrong information. I then inquired how it was possible that I called the IRS 1-800 number and was told there was no offset, filed my 2010 taxes and received the refund, so how is it possible that 4 weeks later there was again an offset on my account. This time the supervisor told me that there was a "glitch" in their system which took EVERYONE off of the offset program in January and February and that this "glitch" was fixed in the few days between my filing of my 2011 taxes and the date for direct deposit ( 2 week window). They told me there is nothing I can do or have my refund returned to me. I don't know what to do. I feel that I did everything I was supposed to do in regards to making on time payments and checking on the status of my loan. It is not my fault that I was told the wrong information by multiple people AND an automated hotline. There would be no other way to verify the information. I feel that I did my due diligence and not my fault they have glitches and problems with their system and employees. If I knew the rehab process would take longer, I would have waited to file my taxes. I should not be penalized because of their inadequacies. I also never received any letter telling me that my taxes would be offset. If the offset was placed back on my account after my taxes were filed, this gave me no chance to do anything to avoid the offset. I am unemployed and was relying on my refund to pay rent, bills, eat, etc. Is there ANYTHING I can do to receive this refund that the Department of Education TOOK from me? It is obvious that there are many issues with this Department. From erroneous bills sent, no bills sent, employees giving wrong information, "glitches" that give wrong information to the IRS AND I was also told today that I never made my payment in October. This payment was on my account and suddenly "disappeared". I have my bank statement saying otherwise. Thank you in advance for your help. Hopefully you can point me in the right direction.
    0 Votes

    • 35x35
      Mar, 2012
      Bill
      Melissa, I sympathize with you. The bureaucracy is really brutalizing you. I have three suggestions:
      1. Contact the DOE Ombudsman.
      2. Contact your elected federal representatives, your congressperson and senators. Speak to their constituent services department. Sometimes, the clout that they can bring to the situation will get more done that an individual acting on her own.
      3. Speak with an attorney.
      0 Votes

    • 35x35
      Mar, 2012
      Melissa
      Thank you very much for your suggestions!!
      0 Votes

    • 35x35
      Apr, 2012
      J
      My understanding of the new laws on student loan repayment is that if the borrower pays 15% of their income toward their loan for 10 consecutive years (120 payments), then the balance on the loan is discharged. Since the garnishment rate is also 15%, I am trying to find out if the loan can also be discharged after the same period of time. Would anyone know this answer?
      0 Votes

    • 35x35
      Apr, 2012
      Bill
      You have to be in an Income Based Repayment IBR) plan or an Income Contingent Repayment (ICR) plan can wipe out the remaining balance on a student loan, after a number of years in the program. For the IBR it is 20 and for the ICR it is 25.

      There are also Public Service Loan Cancelation programs, where, if you enter into certain public service jobs, keep the job for 10 years, and make all your IBR payments as agreed, your entire remaining loan balance will be forgiven.

      Payments that are made due to a garnishment do not qualify you for having your loan term shortened or balance wiped out after a certain time.
      0 Votes

    • 35x35
      Apr, 2012
      Skip
      Hi Melissa, The exact same thing has happened to me. My loans were supposed to rehabilitate in May 2011 and to date have not yet been processed. I verified with Dept of Treasury (DOT) I had no holds and filed my taxes. Sometime during Jan-Mar time period the Dept of Ed re "certified" me with the DOT. Being "certified" means they can take your tax return without notice/warning. Everything you said, I too have experience (no bills, billing errors, Oct 2011 payments not posting until Jan 2012, phone representatives telling lies, poor customer service, etc...). After repeatedly calling (sometimes on hold for more than an hour) I was eventually told this has happened to 10's of thousands of people. Originally, I was told the offsets would be returned and recently the story has changed to "we don't think they will be returned". I haven't found anyone to help...Ombudsman were a waist of time as they cannot make any changes in the Default area of the DOE. Total runaround. I even asked if the amount could be put towards my payments - thus recouping the offset overtime and was told if I didn't continue making the payments I would go back into default and the process would start again. I'm assuming you also received the letter congratulating you on your rehab - yeah, not worth the paper it's written on. I was then advised by the default group there is nothing they can do and that I should contact my congress person. When asked I got responses of...this shouldn't of happened to you, we understand your situation (yeah right). At no time could they answer any of my questions (Will this offset be refunded, When will this be refunded, etc...). Originally, they said to wait 30-60 days before calling back...for those of us that have to pay bills, I don't know what we are supposed to do. I'm thinking of reaching out to a lawyer or the media - everyone likes a David vs. Goliath battle. All in all, my experience has been identical to yours...you do everything asked of you only to be penalized for doing the right thing. They hold all the cards and could care less how they hurt people.
      0 Votes

    • 35x35
      Apr, 2012
      J
      Do you know how any of this would differ if the loan is a state department of education student loan rather than a US Department of Education student loan?
      0 Votes

    • 35x35
      Apr, 2012
      Bill
      Which state offered the loan? Are you residing in that state?
      0 Votes

    • 35x35
      Apr, 2012
      J
      It is a loan from the Florida Department of Education and I do still live and work in the state.
      0 Votes

    • 35x35
      Apr, 2012
      Bill
      Here is what I learned from the Florida Department of Education. Regarding administrative wage garnishment:
      The Florida Department of Education (Department), Office of Student Financial Assistance (OSFA) serves as a guarantor for the Federal Family Education Loan Program (FFELP) and as the administrator of Florida's scholarship and grant programs. As a student loan guaranty agency, the Department administers the FFELP through an agreement with the U.S. Department of Education (ED) and in compliance with Title 34, Section 682.400, Code of Federal Regulations, and Florida Statutes. Public Law 102-164, 109-171; Section 488A of the Higher Education Act; 20 U.S.C. Section 1095a et seq. allows OSFA to administratively garnish up to 15 percent of a debtor’s disposable pay as defined by 15 U.S.C. Section 1673, unless the debtor provides OSFA with written consent to deduct a greater amount. This law supersedes any state laws governing wage garnishment.

      Regarding any right for the OSFA to offset any Florida benefits, such as unemployment and state tax refunds:

      OSFA does not offset any Florida benefits, and Florida does not have a state income tax.

      Regarding how long the OSFA reports delinquent student loan payments for a borrower to the credit reporting agencies:

      The Fair Credit Reporting Act, §605 [15 USC §1681c et seq.], requires the record of a student loan default to remain on the borrower's credit history for seven years from the default date. Therefore, the Department reports each defaulted student loan, the date of default, the balance at the time of default, and any changes in the status of the loan, including any change in the loan balance.

      We followed-up with Florida Department of Education and asked if its loans are subject to IBR and ICR, and will report what we learn here.

      0 Votes

    • 35x35
      Jun, 2012
      J
      Thank you. I hope that the Florida Department of Education follows up with you. I look forward to the additional information.
      0 Votes

  • 35x35
    Mar, 2012
    Kevin
    Can Private Student Loans be discharged in Chapter 13 after the 5 years?
    0 Votes

    • 35x35
      Mar, 2012
      Bill
      I can't give you legal advice. For an authoritative answer to your bankruptcy law question, consult with a bankruptcy attorney. However, I will share my non-legal opinion.

      My understanding is that while you can include such debts in a Chapter 13 filing, the debts need to be paid in full. Whatever remains after the Chapter 13 is discharged continues to be your responsibility. The only time I know of that student loan debts can be discharged in bankruptcy occur when you can prove to the bankruptcy court's satisfaction that you are experiencing an undue hardship.
      0 Votes

  • 35x35
    Mar, 2012
    Kevin
    Hello!, Student Garnishment began to take 15% percent of my check over a year ago, and I was making volunteer payments bi-weekly after Collections called me. Now when collections told me I was ALMOST done with my Payments, I asked them about the Garnishment thats been taking out every check, and My Income Tax thats been taken away by Dept. of Edu., and they told me there were no signs of them both on my account! they gave me a Loan tracking number, but that took me around in circles! Is there any other method I can go about this?
    0 Votes

  • 35x35
    Mar, 2012
    Michael
    I was released from my last job, lived homeless for a few years, and finally got back on my feet with another job. In that time I communicated with the student loan debtors my situation. Under federal law, I was under the impression I could not be garnished for a year after landing this new job. Yet I was garnished anyhow. I did not receive letters regarding this. When I called and asked them to resend, I did not receive them again. They are telling me that I should get a lawyer because the time to challenge the garnishment has passed. Is this the only route, getting a lawyer?
    0 Votes

    • 35x35
      Mar, 2012
      Bill
      Michael, I think consulting with a lawyer who has consumer law experience is your best choice.
      0 Votes

    • 35x35
      Mar, 2012
      Anticollections
      I am pretty sure you can get the garnishment stopped if you have a AWG. I think you need to have been terminated from your last job and not employed FT for over a year to let the AWG stick. Pay your bills, but make sure you are paying in your best interest.
      0 Votes

    • 35x35
      Mar, 2012
      Bill
      Thank you for your comment. It is possible to request a hearing for an Administrative Wage Garnishment (AWG) on a delinquent federal student loan. It is possible to do this on your own, however getting professional help, as suggested, may be helpful. If you wish to learn more about the AWG process read the Administrative Wage Garnishment page on the FSA (Federal Student Aid) Web site. Here is what the FSA has to say about your unemployment and AWG problem:
      An opportunity for a hearing to present and obtain a ruling on any objection that garnishment cannot be used at this time because the borrower is now employed within a 12-month period after having been involuntarily separated from employment

      You will find other helpful information including an address to send your hearing request.

      0 Votes

  • 35x35
    Mar, 2012
    jem
    My girlfriend's wages got garnished about 4years ago, acs received the payments but never gave it to my college, been battling this since. Now they want to collect on the money again...help
    0 Votes

    • 35x35
      Mar, 2012
      Bill
      I assume your friend was a co-signer on your student loan, which would explain why your friend had her wages garnished for your student loan debt. Evidence is your friend. Gather all of the documents you can find to show when the garnishment started, ended, and how much ACS removed from your friend's wages. Your friend's employer will have records of this action, too. Then take all of those documents to a lawyer who has experience in civil law, and ask him or her to fire off a pointed letter to ACS and the college explaining that you will file a lawsuit if the college makes another attempt to collect a debt previously paid.
      0 Votes

  • 35x35
    Mar, 2012
    Carly
    we have been paying min. payments on my boyfriends student loan and they took 2500 out of 2800 of our tax return. 1000 of that was from having a child last year and we are devestated they would take that. Is there a way we can get a majority of it back? i have to say we need that money.
    0 Votes

    • 35x35
      Mar, 2012
      Bill
      I think it is too late to get the funds back, but I can't give you tax advice. Only a tax professional can properly give tax advice.

      It sounds like he filed a return claiming the child that the two of you have. Perhaps if you filed and had claimed the child you would have benefited, as you would not be subject to his garnishment order. Maybe you did not do this because you did not work? I recommend that you speak with a tax professional, to get an authoritative answer.
      1 Votes

    • 35x35
      Mar, 2012
      frank
      Call the department of education and see about filing an injured spouse form. If you were not working this year and all of the return is from his earnings then I do not think this will help. Otherwise I believe you may be able to file an injured spouse form, prove the portion of the return that would have been yours and you may be able to get it back. Also what do you mean by he is making minimum payments? Is he in a rehabilitation program? I would also ask the department of ed about Consolidation and Rehabilitation and see what is best options are. Losing your taxes is expensive because I believe it pays penalties.
      0 Votes

  • 35x35
    Mar, 2012
    g
    My student loan was in default. I arranged automatic scheduled payments with the lender for 9 months. After the 9 months they would then submit my loan out of default to another lender. I have the documentation. This month would have been my last payment. They canceled my automatic payments without notification. Upon calling them they claim they needed additional personal information that they sent to me that I did not return it so therefore canceled my payment arrangements. I will now have to enter the default program again with an additional $2,000 in interest fees. I feel I have been scammed. They cancel my automatic payments 1 month before I complete the program? The payments were not canceled by me or my bank they were canceled on their end. What can I do?
    0 Votes

    • 35x35
      Mar, 2012
      Bill
      The first step I would take is to contact the lender again, asking to speak with a supervisor. Explain again what happened. Work your way up the food-chain, if necessary. If you make no progress, you may need the assistance of an attorney, to get results.
      0 Votes

    • 35x35
      Mar, 2012
      Frank Ashley
      An attorney is not going to do much for you unless you can find one that is willing to get on the phone right away. if you have made your last payment in the last 45 days I would call the lender, not the creditor and see if they can fax a rehab letter to you and have you make a payment ASAP to complete the program. I have seen alot of folks have your issue. Also check into consolidation with direct loans if the rehab program is not going to go through. There are different benefits to each program so you will want to weigh your options. Do not waste any time and good luck.
      0 Votes

  • 35x35
    Feb, 2012
    Pablo
    I'm default on a private student loan. Can they garnish my tax refund this year? The private student loan is already with a collection agency. Thank You
    0 Votes

    • 35x35
      Feb, 2012
      Bill
      Your tax refund will not be grabbed due to a debt on a private student loan. If you have a federal student loan that is in default, then your tax refund is at risk.
      1 Votes

    • 35x35
      Feb, 2012
      Pablo
      Thank You for the information.
      0 Votes

  • 35x35
    Feb, 2012
    M
    Can they take my tax refund if they're already garnishing my check every week? And I paid half of my student loan already?
    1 Votes

    • 35x35
      Feb, 2012
      Bill
      Yes; if the Dept. of Education is garnishing your wages, your tax refund can be taken in a process the federal government calls "offset." If you can, try to adjust your withholding, so you would not end up with much of refund. You don't want to stop your withholding and end up with an IRS debt, but have only enough withheld to cover your taxes or end up with a small refund. Of course, if you have less withheld, a portion of the extra money will go away in the garnishment.

      If your wages are garnished by a private student lender, the answer to your question is, "No, a private student lender may not garnish an income tax refund."
      0 Votes

  • 35x35
    Feb, 2012
    Elizah
    hello, so i am in a mixed up situation with an agency call ECMC they said i owe them a large amount of money, to begin with the collectors had no clue what school i owed that money to, they didn't have my ssn to begin with, until i dumbly gave them my ssn, and once i did it immediately showed up in my credit report, and now as we speak its not there, im confused, but I have already made all my student loan payment and unfortunately now they got a hold of my irs check in which i was going to pay my past due rent, Im young live all alone no support, so what am i suppose to do next, i have 2days left before the agency gets a hold of my refund???
    0 Votes

    • 35x35
      Feb, 2012
      Bill
      If the student loan is federal, then see the Dept. of Education's Administrative Wage Garnishment page to learn how to dispute and halt such a garnishment.
      0 Votes

    • 35x35
      Mar, 2012
      Denny
      Unfortunately there is nothing you can do in 2 days. ECMC is a very ruthless collector. they care nothing of you, your family, job, or how any debt they claim is owed to them is obtained from you, they will lie, cheat, or what ever they have to do to get money, even if it ruins you. I know, I've been there. My loan was with Sallie Mae, Never Ever get a loan with Sallie Mae for any reason.
      0 Votes

  • 35x35
    Feb, 2012
    Shelley
    I make $500 every two weeks. I have a Perkins loan that with fee is up to $3,000. They want me to make $150/month payment or they will attach my wages. What is the best thing for me to do?
    0 Votes

    • 35x35
      Feb, 2012
      Bill
      Are your student loans federal or private?

      Please ask any follow-up questions you may have on the appropriate page.

      0 Votes

  • 35x35
    Feb, 2012
    JEN
    I have a student loan that went into default & I am now being wage attached. It was a loan for $20K & now owe over $50K. Can they do that? Is there any way to stop the wage attachment? They take over $170/pay from me. Also I never get any kind of pmt statement from them & never got a 1099 form & tried looking on the website & it's not there anymore for the dept of education. It's gone!
    0 Votes

    • 35x35
      Feb, 2012
      Bill
      Interest continued to accrue on your debt, so it could be possible that it grew to its current size for that reason. However, you should be able to get a statement for your account. I am not sure what Web site you are trying to find, but here is a link to the Dept of Education Web site.

      You may want to check your credit report and look at the back of it, to view the contact information for you student loan lender.
      1 Votes

  • 35x35
    Feb, 2012
    Marlen
    I have a student loan that went into default. We were supposed to get our refund today and it was offset due to the loan. My husband and I filed jointly because I only worked 3 months in 2011 and made only 3k dollars. So our refund was his money actually. We filed jointly because of the fact I didnt work. I had spoken with someone and informed them I wasnt working. Due to there being no openings for my field in my area. They said if I did begin working to inform them. I still havent found work. We need this money desperately. My husband is the only income for a family of 6. What can I do to fight this? Or for my husband to fight it. Since it is HIS refund. If we are unable to get this refund back, we are facing losing our home. My husband was hospitalized in Dec and since he just stsrted this new job in March of 2011 it set us back financially alot and we need this money. What can I do to garauntee they dont do this again next year? Would filing married but seperate help? What and how can I work to getting our refund this year? Thank you I would appreciate anyones help!
    0 Votes

    • 35x35
      Feb, 2012
      Bill
      Because you filed a joint tax return, the Dept. of Education has the right to offset your tax refund. I am not aware of any means to recover amount offset, if you owe the amount the Dept. of Education claims. Next year, file separately, or adjust the withholding so your spouse takes home more pay so that your tax return is at or near zero.
      0 Votes

    • 35x35
      Feb, 2012
      diana
      File your joint return with an injured spouse form 8379.
      0 Votes

    • 35x35
      Feb, 2012
      frankie
      Absolutely file the injured spouse form. They will give him back most of it in almost every case I have ever seen. Also why are you in default there are tons of options, well not really but usually ICRP or IBR to help if you did a WDF consolidation. Google it.
      0 Votes

    • 35x35
      Mar, 2012
      Carlos
      You can file an 8379 form with the IRS which is used for a partial debt for yoour spouse and not yourself.
      0 Votes

  • 35x35
    Feb, 2012
    iman
    I have a $7,000 student loan and have been being garnished through a collector since September. Tax season prior Department of student loans took my refund. I'm still being garnished and now that the debit is with a collection agency will they still take my refund check?
    0 Votes

    • 35x35
      Feb, 2012
      Bill
      The Dept. of Education has the authority to direct the Internal Revenue Service to hold tax refund checks and use the refund as payment for a delinquent student loan. This is called "offset." A Dept. of Education administrative wage garnishment does not stop tax refund offsets.
      0 Votes

  • 35x35
    Feb, 2012
    Sonya
    I am currently being garnished by a collection agency for a student loan over 30 yrs old. I was not informed of the garnishment by the agency or my employer. shouldn't I have been informed that this would happen? It will cause a hardship as I only make $16k a year. What can I do?
    0 Votes

    • 35x35
      Feb, 2012
      Bill
      If the garnishment is for a federal loan, the garnishment is federal, and you should have received a 30-day notice. See the Dept. of Education resource Administrative Wage Garnishment to learn more, and how to file for an exemption that will reduce or eliminate the administrative garnishment.

      If the garnishment is for a private loan, then the original creditor or its collection agent must follow your state's garnishment rules. Consult with a lawyer in your state who has consumer law experience to learn how to reduce or eliminate the garnishment.
      0 Votes

  • 35x35
    Feb, 2012
    erin
    I have a huge amount of student loan debt 300k mostly private and through sallie mae. I was making payments but could not afford the full monthly payment owed along with my other loan payments and bills. It was sent off to a collection agency. I live in NJ and make decent money. I'm also a single mom and im concerned about 25% of my disposable income being garnished. Where can I get guidance on this issue. I've been told in past to default on all loans and let all federal and private loan providers garnish as it might be less than me trying to pay everyone. any advice or can you direct me to an agency that might help me, I need to know what can and can't be garnished, frozen, taken etc.
    0 Votes

    • 35x35
      Feb, 2012
      Bill
      The last thing I would advise people to do is stop payments on all loans because a garnishment would be cheaper than minimum payments — especially for student loans. Consult with a lawyer in your state who has consumer law experience to receive advice tailored to your situation. Your income, debt load, expenses, and so on matter. Ask the lawyer about a chapter 13 in your situation.
      1 Votes

    • 35x35
      Feb, 2012
      Frank Ashley
      I would suggest you figure out what an income contingent payment would be on the federal. On the private I would gather as much info as you can. Identify your abilities and then get somebody to fight for a good settlement and see if you can afford the end result. Garnishments are bad, but the worst part about loans of your size is stress. Stress can kill and that is what you need to mitigate. I hope you luck. Private loans are kind of a trap for many students and hopefully sometime soon the government rethinks how this system works. Frankly If you can find me on facebook I will be glad to tell you better details. Also, bankruptcy is not going to help you. Every bankruptcy I have ever seen on student loans is denied.
      0 Votes

  • 35x35
    Feb, 2012
    Brenda
    I wasn't 270 days late on my Perkins loan, however the University put me into default and sent my loan to a collections agency. The agency suggested I consolidate my loans, which I did. I just received a letter today from the consolidation company that the loans were disbursed on 12/30/11. However, the university took my income tax return. Wouldn't the consolidation have taken care of any money that I owe?
    0 Votes

    • 35x35
      Feb, 2012
      Bill
      It is not clear why you were put into default, but I am glad that you were able to consolidate your loans and arrange a payment schedule. If your income tax refund was garnished, it should have been applied to the outstanding debt. Check your numbers carefully to verify how much you owed before the consolidation, and how much you owe after. If there is a discrepancy, then speak with the servicer. If the offset has caused you financial hardship the read the Dept of Education's page about disputes for IRS offset.
      1 Votes

  • 35x35
    Feb, 2012
    d
    I am being garnished wages for the past year or so for a fed. student loan and I am just curious to know if the payments they take are tax deductible?
    0 Votes

    • 35x35
      Feb, 2012
      Bill
      Yes, the interest may be deductible. You should receive a 1099 statement from the loan servicer about the amount of interest you paid.
      0 Votes

  • 35x35
    Jan, 2012
    ronald
    I have one more payment on my defaulted school loan how do I make sure they stop wage garnishment when it's paid?
    0 Votes

    • 35x35
      Jan, 2012
      Bill
      Talk to your employer's payroll people to make sure they are aware the garnishment order is satisfied, and your paycheck should no longer be garnished. Be sure to bring documents to your meeting so that you have evidence to back your statement.
      1 Votes

  • 35x35
    Jan, 2012
    Eric
    Hello, I have a student loan after going to a 4yr University. Sadly I have gone into default and the govenrment has been garnishing out (I believe) 10% for my post taxes wages per pay period. This has been going on for almost 7-8yrs now, and I'm not sure when it's suppose to end. Is there 1) a way I check my current balance of my loan? and 2) Is there any way for me to discontinue the wage garnishments, and go back to being able to pay it off manually? Thank you very much for all you help!
    0 Votes

    • 35x35
      Jan, 2012
      Bill
      You mentioned your loan is federal. See the Dept. of Education’s Loan Rehabilitation page to learn how to remove the wage garnishment.
      0 Votes

    • 35x35
      Jan, 2012
      Eric
      Thank you very much for your help Bill. I emailed them for more info, thanks again!
      0 Votes

  • 35x35
    Jan, 2012
    Lola
    I am in default on my student loans, and recently received a call advising me I had to start making payments of $109 a month or my wages would be garnished 15%. I called them and told them I could pay $30 a month after explaining, how much I make minus all my bills not including food or utilities i have $100 a month left. They told me I could make that payment but they may still garnish my wages. Any thoughts? Advice? Help? Is appreciated. Thanks
    0 Votes

    • 35x35
      Jan, 2012
      Bill
      Is your student loan federal? If so, the Dept. of Education has the ability to do what it calls an Administrative Wage Garnishment (AWG). If you cannot afford the 15% garnishment, you can request a hearing with the Dept. of Education to reduce the amount of an AWG. See the Dept. of Education's AWG Request For Hearing forms (PDF) to start the process.

      Reread the original answer above and follow the links that apply to you to learn if you can defer or forebear your student loan payments.
      0 Votes

  • 35x35
    Jan, 2012
    Dennis
    I had previously paid back student loans. I had to take out several due to the fact that my parents could not afford to assist with college expenses. I apparently did not repays 2 loans which totaled about $15k. This amount was from 1992. I attempted to set up payment which I could afford of $250.00 per month. The Department of EDUMACTAION (YES I INTENTIONALLY SPELLED THIS INCORRECTLY) rejected the offer and garnished my wages at 15%. At the time I was making around $38k and now am making about $43k. The repayment amount on $15k with 12 years of interest compounded at 8% came to about $43k. In the past 2 years, I have paid nearly $11k and am rapidly approaching the principal amount of $15k. This garnishment has forced me to obtain a second job working 5-6 nights per week to make up for the $380-$400 dollars per month that the dept of education takes from my check. This amount being taken has brought the little bit of saving I had to almost nothing (down to $142 in savings account). I have also done some checking on line and it is reported that a number of our elected officials in Washington have defaulted student loans from the 70's and 80's and yet their wages are not being garnsihed. anyway, my question is, is there anythng I can do to ask that the garnishment amount be reduced to maybe 8 or 10%? This is starting to become a major financial burden.
    0 Votes

    • 35x35
      Jan, 2012
      Bill
      You described what the Dept. of Education calls an Administrative Wage Garnishment (AWG). You can request a hearing with the Dept. of Education to reduce the amount of an AWG. See the Dept. of Education's AWG Request For Hearing forms (PDF) to start the process.
      0 Votes

  • 35x35
    Jan, 2012
    Tina
    All my student loans are federal. I thought I was in forbearance, but apparently that was only for the loans I took out for my undergrad degree. The ones I took out for my Master's are delinquent & I didn't know cos the notices were going to my old address. Yesterday I received a notice, at my current address, that they were going to garnish my wages. I called them today & set up payment arrangements to stop the wage garnishment but they said it was too late to do anything about my tax refund. I don't trust them though because they're collection agents & will say whatever to get their $. I NEED that tax refund to move into a cheaper rental so I can pay back all these loans. Any help or guidance would be greatly appreciated.
    0 Votes

    • 35x35
      Jan, 2012
      Bill
      If you are being garnished for a federal loan, I don't believe there is any action you can take to ensure that you will get your tax refund, aside from getting the loan back into good standing. Perhaps filing later rather than sooner will allow enough time to pass so that the IRS is aware that you're no longer in collections. Maybe speaking directly to the IRS (800) 829-1040 would give you some concrete information about this.
      0 Votes

  • 35x35
    Jan, 2012
    Al
    I have two loans, one federal and one private. The federal one was from a Master's Degree that I completed in 2004. The loan was in forbearance due to me being enrolled in a Doctoral program. I am a school teacher, and I should qualify for the loan forgiveness. I had to take a leave of absence from school due to my parents' illnesses (they live almost 400 miles away, and I had to commute sometimes twice weekly), and I was removed from the Doctoral program due to a clerical error. Before I could return to school, the loan payments kicked in for both loans, to the tune of about $800/month. When I contacted the private lender, they didn't provide much help; and they stated that the forgiveness program had been discontinued due to budget issues (this was late '08 or early '09.) Unfortunately, I didn't follow up; I took their word, and tried to pay. One went into default and garnishment, I tried to continue to pay the other until I lost my home - after that, the second went into default. I am now being garnished just shy of $1000/month; and I'm having trouble covering living expenses. Is there any help other than bankruptcy (reorganization)? Is there a consolidation loan of some sort for a person that now has horrible credit, but has still been making these ungodly payments (even though it is 'involuntary')? The only offer I've been given is the rehabilitation program that would surely send me into homelessness.
    0 Votes

    • 35x35
      Jan, 2012
      Bill
      I am not aware of any programs for consolidating debt for people with horrible credit. The Chapter 13 bankruptcy option you mentioned could offer some payment relief, depending on how the court views your living expenses. I suggest that you consult with a bankruptcy attorney.
      0 Votes

  • 35x35
    Jan, 2012
    Shawna
    I am not having wage garnishment and am working with the company to try for rehabilitation..how do I KNOW that they are going to take my tax refund? The only way for hubby and I to get a good refund is for us to file joint. But, I don't want him to suffer for my issues. They have not "said" that they will take it, but it is on my social security number at the IRS office. I've never had my taxes taken, yet...
    0 Votes

    • 35x35
      Jan, 2012
      Bill
      If it is a private student loan, then your tax refund cannot be taken. If it is a federal student loan that is in bad standing, then your tax refund is at risk and his is, too, if the two of you file jointly.
      0 Votes

    • 35x35
      Jan, 2012
      becky
      You can also file an injured spouse, this will prevent your refund from being taken. It takes a little longer to process so you won't be seeing your refund for a couple of months after filing but at leats you will get it! I can't remember the particulars but my husband and I filed injured spouse two years in a row to protect him from losing his refund to the vultures. Afterwards I set up a payment plan, once we were financially able to do so.
      0 Votes

    • 35x35
      Jan, 2012
      Bill
      If you meet the test for injured spouse relief, you can use the IRS Form 8379. Community property issues can complicate injured spouse claims.
      0 Votes

    • 35x35
      Jan, 2012
      Rhonda
      how long has your social security number been flagged? mine is also flagged but i havent received notification that it is being offset.. Im afraid its going to be and am trying to find out without directly calling the collection agency, as i dont want to bring myself to their attention just in case they have not selected my account for with holding. It says on the recording that I got when i called the DOE that i MAY have my taxes offset, IF I was selected.
      0 Votes

    • 35x35
      Jan, 2012
      Rhonda
      I just learned through calling the 800 number for the Department of Education that my social security number has a Federal Student Loan debt attached to it and "may" be selected for offset of my 2011 tax return. Does this actually mean that it WILL be offset and that I will definitely NOT receive a return, or is there a chance that I will not be "selected" and they will not keep my return? My loans have been in default for about 2 or 3 years and I have no idea how long this information has been attached to my social security number. Ive never been threatened with with holding in the past and have no idea whether to expect a return at all. I owe approximately $27,000 to the company listed as the collection agency, Regional Adjustment Bureau. I was unsure if there was some time limit on how long you had to be in default before they would garnish or withhold your taxes or income... I know some who have loans that were 20 years old before garnishments were started and others who went into default just a year ago and have been having wages garnished for 6 months and also do not receive a tax return. Any information would be appreciated.
      0 Votes

    • 35x35
      Jan, 2012
      Bill
      Do you have a tax refund due? If so, it will most likely be subject to an administrative garnishment. A federal student loan that is not paid for 270 days is in default and subject to garnishments. I recommend that you read the Bills.com article default on federal student loans for more information. Rehabilitation is one possible solution and you can read about various income based repayment programs.
      0 Votes

  • 35x35
    Jan, 2012
    Anne
    I appreciate you making the distinction between private and federal loans. So that I'm clear, if my loans were consolidated through Direct Loan -- are they then considered federal? If so, are there any steps that I may go through to have the amount I'm currently being garnished in state of California? I was told that I may be able to go to court to have it reduced but not removed? I am a social worker and have been in service to the community for over 10 years at a low salary - any considerations there? Thanks so much for your answers!
    0 Votes

    • 35x35
      Jan, 2012
      Bill
      Two reading assignments you may find encouraging:
      1. Federal Student Loan Default explains options for repaying a federal student loan, including IBR, ICR, and other repayment options.
      2. Federal Student Loan Forgiveness Programs, which describes the College Cost Reduction and Access Act of 2007 Public Service Loan Forgiveness (PSLF) program. PSLF discharges any remaining student loan debt after 10 years of full-time employment in public service.

      Direct Loans are federal loans. It is my understanding that only federal loans can be included in a Direct Loan Consolidation. If you can rehabilitate your loan, then you appear to be a prime candidate for PSLF. I encourage you to investigate that option vigorously.

      0 Votes

    • 35x35
      Jan, 2012
      Anne
      Thank you for your swift reply! Since I am in wage garnishment already (and have therefore defaulted) - am I correct in reading that it doesn't matter and I will not be eligible for future relief despite my public service job?
      0 Votes

    • 35x35
      Jan, 2012
      Bill
      The Bills.com page Federal Student Loan Forgiveness Programs discusses the eligibility requirements to qualify for Public Service Loan Forgiveness.

      You mentioned you are in default. If you rehabilitate your federal student loan, you will be eligible for the Dept. of Education's Public Service Loan Forgiveness program.
      0 Votes

  • 35x35
    Dec, 2011
    Jennie
    The majority of questions and answers I've read regarding student loans apply to loans for less than $100,000. My boyfriends private student loan debt exceeds $200,000. Federal loans are a little over $100,000. We can handle the federal loans, they work with us. Our private loans cannot be consolidated because of the amount, and they will not work with us to lower our payments. After paying for these loans ($3000+ a month) we fall shortly below the poverty level. We make a lot, but nonetheless, we're drowning in debt. What are our options? If they garnish even 25% of our wages, we'll be paying less than we do now, so it's worth it to have them garnish, yes?
    0 Votes

    • 35x35
      Dec, 2011
      Bill
      It can make sense to allow a garnishment to take place, if the size of the garnishment is smaller than what you are currently paying. One negative of that approach is that the smaller payment means it is going to take longer to pay off the loan and, therefore, the overall interest charges are greater. That fact can certainly be outweighed by the affordability of the smaller payment. Keep in mind, too, that a bank levy can take place, depending on your state's collection laws, once a judgment that allows a wage garnishment is in place.
      0 Votes

  • 35x35
    Dec, 2011
    Lila
    I owe just under 3,000 $ because they changed my financial aid after the fact they are threaten me with wage garnish legal actions. 2 questions 1) what legal actions can they take? and 2) i live in NJ how much of an 800 $ every two week paycheck will they take?
    0 Votes

    • 35x35
      Dec, 2011
      Bill
      I can't give you legal advice, but will share my opinion.

      You don't state whether your loan is a federal student loan or a private student loan, and the rules are different for each. For a private student loan, you can't be garnished without being sued and having a judgment entered against you. New Jersey law allows 10% of your disposable income to be garnished, if you earn less than 250% of the federal poverty level. If you earn more, then you can have 25% garnished. Your current income should keep you at the 10% garnishment level. for your private student loan.

      If you have a federal student loan then you can have 15% of your disposable income garnished and the garnishment takes place without a lawsuit, through what is called an administrative garnishment.
      0 Votes

  • 35x35
    Nov, 2011
    Francisca
    My wages are currently being garnished by both loan servicers. When my loan was in collections the collections agent and I went through my budget and pretty much came to the conclusion that I either A) pay the full amount of my loan right away (because I have thousands of dollars just laying around) or B) pay monthly installments which were too high for me to even afford. Now my wages are being garnished. And I am struggling to make it financially. I am falling behind on my car payments. I commute 40 miles to work each way and cannot afford to lose my car or I will lose my job. Especially since the public transportation does not have bus routes near where I work. I've had to borrow money just to get by. I can't keep doing this. What do I do? I've found a couple forms online. One is to request a hearing and the other is the financial disclosure statement. But I'm not sure which to complete or if they will even help. Any advice?
    0 Votes

    • 35x35
      Nov, 2011
      Bill
      It is difficult to offer a useful observation without knowing more about what I assume are two student loans. Are the loans private or federal? If federal, then consider the Dept. of Education Income-Based Repayment Plan. If private, then consult with a lawyer to learn what state laws may apply to you that limit the amount garnished.
      0 Votes

  • 35x35
    Nov, 2011
    Angela
    Hi. I have read up on the rules of garnishing disposable income, and I came to the same conclusion as you have stated, that $217.50 per week of my net pay per week CANNOT be garnished? Correct? If I bring home $600 in 2 weeks, I am being garnished a full 15%, or $90. If I am understanding this correctly, shouldn't they only be able to garnish the difference of the $600 and the $534 limit? So I should be getting garnished 15% of $66, or $9.90. Is this correct? I called the holder of my loan, and they told me that the disposable income limit of $217.50 only mattered if you made LESS than that. Any less, they can't garnish you at all. Any more, they take the full 15% of your entire check. My 2 kids and I are getting to the end of our rope with this and they won't even offer me a payment plan because I missed a payment last December and was put on Admin garnishment. Please help!
    0 Votes

    • 35x35
      Nov, 2011
      Bill
      I believe you are interpreting the garnishment rules incorrectly. Below the weekly threshold, and the Dept. of Education can garnish zero. Above the threshold, and the DOE can garnish 15%. Period. The difference between the weekly threshold and your actual post-deduction wages is not found in the law as I read it.

      You may be able to file for an exemption. Call your county bar association and ask for the names of the organizations that provide no-cost legal services to people with low or no income in your area. Make an appointment with one of the organizations, and bring all of the documents and letters you have regarding the debt to your meeting. The lawyer you meet will advise you accordingly.
      0 Votes

    • 35x35
      Nov, 2011
      ashley
      Most likely you can consolidate at www.ed.dl.gov that would stop you awg and let you get on a payment plan. In most cases this works just fine. but consider your repayment agreement before you sign.
      0 Votes

  • 35x35
    Nov, 2011
    Bennie
    I have a garnsment of 15%. A chance to get back in college has come up. Will going back to school stop the garnesment?
    0 Votes

    • 35x35
      Nov, 2011
      Bill
      Going back to school will not automatically stop the garnishment.

      If it is a federal loan, then you risk losing any possible tax refunds. Also, if your wages will decrease due to going back to school and you feel that you will be in a financial hardship then contact the Dept. of Education to see about creating an alternative pay schedule. You must meet the Dept. of Education's definition of hardship.

      Remember that your wages are always protected up to 30 times the federal minimum wage.
      0 Votes

  • 35x35
    Oct, 2011
    Mike
    I am currently being garnished 15% on a federal loan. Where do I find my balance due?
    0 Votes

    • 35x35
      Oct, 2011
      Bill
      Check your original promissory note. It will identify your lender and/or guaranty agency.

      For a Federal Student loan where you don't know who services your loan, use the National Student Loan Data System or call 1-800-4-FED-AID.
      0 Votes

  • 35x35
    Oct, 2011
    Rich
    Is there any way I can stop them from taking my income taxes each year? I was forced to pay $500.00/mo after about 6 months into it I lost my job and could not afford to keep up with the payments. It's been 3 years since I've collect my income tax check. Any advice would be greatly appreciated.
    0 Votes

    • 35x35
      Oct, 2011
      Bill
      I don't believe there is any way that you can stop your tax refund from being taken.

      Your only defensive strategy may be to change the amount of taxes being withheld from your pay, so you don't end up with a refund.

      Don't leave yourself in a position where you reduce your withholding to the point where you end up owing the IRS a lot when taxes are due. Use the IRS withholding calculator, so you can either only owe a tiny amount or would lose just a tiny refund.
      0 Votes

    • 35x35
      Nov, 2011
      Denny
      If you reduce your tax refund by what you claim...they will still be getting 15% of it out of their paycheck anyhow.
      0 Votes

  • 35x35
    Oct, 2011
    Teresa
    I got a student loan through citi bank which 7 years later I found out it was a federal loan and they are now garnishing 15% off my work paychecks. They had to get a court order to do so....I am wondering if I will be getting my tax return or will they take it all?
    0 Votes

    • 35x35
      Oct, 2011
      Bill
      Double-check to make sure your loan is federal. The Dept. of Education has the power to garnish wages administratively — by its own authority and without involving a state or federal court — and I find odd the Dept. of Education would go to the expense and trouble of filing an action in your state's court to get a judgment. Why does this matter? If your student loan is really private, then the answer to you question is almost certainly no, your tax return is not at risk of interception. If your student loan is federal, then the answer to your question is yes, your federal tax return is at risk of interception.
      0 Votes

  • 35x35
    Oct, 2011
    William
    I have defaulted student loans and was threatened with wage garnishment. I entered a repayment plan but am struggling to make the payments. A friend told me that my wgaes cannot be garnished as long as I am paying something, even if it means just sending $50 or $100 a month. Is that true?
    0 Votes

    • 35x35
      Oct, 2011
      Bill
      Alas, unless your well-meaning friend is a customer service representative at your student loan lender, he or she is repeating an urban myth. See the Bills.com resource If I Pay a Small Amount on My Debt, Can I Be Sued? to read more about this oft-told, incorrect tale of common non-law.
      0 Votes

  • 35x35
    Sep, 2011
    john
    ive defaulted on my student they have stated garnishing my wages for the last 6 months. since they already garnish my wages im i still going to receive a tax return or will i lose that to?
    0 Votes

    • 35x35
      Sep, 2011
      Bill
      If the Dept. of Education is using its administrative authority to garnish your wages, then it is likely but not certain that you will not see a tax return. If a private student loan judgment-creditor is garnishing your wages, your tax return is safe from interception.
      1 Votes

    • 35x35
      Oct, 2011
      john
      my loan is from costep of tx. Is this a private or federal loan?
      0 Votes

    • 35x35
      Oct, 2011
      Bill
      Impossible for me to answer your question. The Council for South Texas Economic Progress (COSTEP) worked with the Federal Family Education Loan (FFEL) Program, which was eliminated in 2010. Many, but not all, FFEL loans were federally guaranteed. Today, it appears that new COSTEP loans are federal, but it would be reckless to say all were.

      Review the contract(s) you signed with COSTEP to learn if your loan(s) was or were federally backed.
      0 Votes

  • 35x35
    Sep, 2011
    Edward
    My wife is facing default on her student loans which she made prior to our marriage. She doesn't work and can't work because of a mental disability. She has no income. Can my tax return or wages be garnished because of her default?
    0 Votes

  • 35x35
    Sep, 2011
    monique vas
    I don't know where to begin. My husband went to Masters Institute back in 97-2001. The government closed down the school due to fraudulent practices. So anyone who went to this school can not transfer these degrees to other schools, they are worthless and everyone probably should have been refunded. For the past year we have had our income tax garnished now they want to garnish my husband wages in 30 days. We have a lawyer and filed for bankruptcy chapter 7 because of credit card debt. and an attempt to get rid of these bad student loans from a school that did not benefit him at all. These people are just unscrupulous. The loans he had were discharged when the school closed and only when he inquired to get a copy of the discharge document they recinded the loans. It has been such a pain to deal with this, and so unfair. I don't feel we should have to pay a dime. I feel like suing them for all the stress and worrying they have put on our family. I think everyone needs to wake up and something needs to be done. I have read some of the posts on here and It is sad that people barley making it are getting there wages garnished. Our system is just so messed up. If anyone has any advice I'd appreciate it.
    1 Votes

  • 35x35
    Sep, 2011
    Aaron
    A private collector is attempting to collect from me on a Perkins loan from 1992 which I am disputing (due to my not attending the college for the term of the loans). Do they have any legal recourse (wage garnishment, etc...) for a debt from 1992 (and thus prior to the Debt Collection Improvement Act of 1996)?
    0 Votes

    • 35x35
      Sep, 2011
      Bill
      The 1996 law made it easier for government agencies, such as the Dept of Education and the Social Security Administration, to intercept tax returns and use other means to collect debt owed to the government. As I read the law, it applies to debts that existed before the law was enacted.

      Given that you dispute the debt's existence, consult with a lawyer who has consumer law experience. You may need to file a lawsuit against the Dept. of Education to resolve, once and for all, your liability for the debt.
      0 Votes

  • 35x35
    Sep, 2011
    Paul
    Bill, I have been making my student loan payment on time each month as agreed with the CBE Group. I am half way to having it out of default. But now the Department of Ed id garnishing my wages as well even though I am doing well with my payments. The CBE Group told me several months ago to not worry about the letters I was getting about my wages gettin garnished becaues I was making my payments on time and for the full amount. I cant afford both, what can I do ?
    0 Votes

    • 35x35
      Sep, 2011
      Bill
      Contact CBE Group and the Dept. of Education about this matter immediately. Also, consult with a lawyer who has consumer law experience to learn if you have a cause of action against CBE Group for breach of contract regarding the promises it made when it demanded you start paying it for your delinquent student loan debt.
      0 Votes

  • 35x35
    Sep, 2011
    Keisha
    I had federal student loans that were consolidated to a private lender, needless to say I have since defaulted on my consolidated loan. I recently received information that I am owing the consolidated debt balance to the private lender (guaranty company) and to the US Department of ED, which doubles the debt. The guaranty company is threatening that they will garnish state wages and they are claiming that the Department of ED will garnish federal wages. I only have one loan debt which is with the guarnty company is this a violation of the fair debt collection act?
    0 Votes

    • 35x35
      Sep, 2011
      Bill
      If I understand the threats you are hearing correctly, a private collection agent working on behalf of the Dept. of Education is threatening to use the state courts to receive a judgment against you for a private student loan. It is also stating that the Dept. of Education will use its administrative authority to garnish your wages simultaneously.

      I would be curious to learn under which circumstances what you described would be possible legally.

      It is illegal to make false or misleading statements about using the court system when collecting on a debt. This is covered in the FDCPA, the Fair Debt Collection Practices Act.
      0 Votes

  • 35x35
    Sep, 2011
    Erick
    Does a person who becomes default and no longer able to continue payments on a federal student loan due to incarceration have to pay interest and penalties and penalty fees during the term of incarceration. Department of education claims a payment arrangement can no longer be made directly with them because it is the second time the loan has become default, they have referred it to a collection agency and refuse to remove interest/penalty fees for the term of incarceration. Am I obligated to deal with these collection agency's?
    0 Votes

    • 35x35
      Sep, 2011
      Bill
      I am not aware of any student loan exemption or waiver available to people incarcerated in jail or prison.

      Dealing with a collection agent might be a blessing in disguise. If the collection agent bought the collection account from the original creditor, then it almost certainly purchased it for a significant discount from the face value, which will give you room for negotiating a lump-sum settlement. Start your negotiations at 15 cents on the dollar.
      0 Votes

  • 35x35
    Aug, 2011
    Katt
    Hi Bill, I have a question; are they still considered student loans if sold to a collections agency? Because I would assume that they wouldn't be after that process, and could be discharged if claiming bankruptcy. :(
    0 Votes

    • 35x35
      Sep, 2011
      Bill
      I regret having to tell you that they are still student loans and very difficult, though not impossible, to discharge in a BK.
      0 Votes

  • 35x35
    Aug, 2011
    jack
    if my wages are already being garnished can the government with take away my income tax return as well?
    0 Votes

    • 35x35
      Sep, 2011
      Bill
      Who is garnishing your wages? If it is a government agency or related to child support, then your tax refund can be taken.
      0 Votes

  • 35x35
    Aug, 2011
    Andrew
    I am currently having my wages garnished for defaulting on student loans. If I start earning less than the minimum amount, will the garnishment automatically stop?
    0 Votes

    • 35x35
      Aug, 2011
      Bill
      Federal law limits how much of your income can be garnished for your student loans. According to the US Dept. of Labor, the amount "that may be garnished in any workweek or pay period to the lesser of 25 percent of disposable earnings or the amount by which disposable earnings are greater than 30 times the federal minimum hourly wage," which is now $7.25. 30x$7.25 is $217.50, so you should be free from garnishment if your disposable income is that or less.

      Your disposable income is what you have left after basic deductions such as federal and state income taxes, social security, and state disability insurance have been taken out. "Deductions not required by law (e.g., union dues, health and life insurance, and charitable contributions) are not subtracted from gross earnings when the amount of disposable earnings for garnishment purposes is calculated."

      Any week that you earn less than this, your employer should not take anything out for the garnishment, but that does not mean the garnishment is stopped. As soon as you start earning more than the protected amount, the money above the $217.50 will be sent to your creditor.
      0 Votes

  • 35x35
    Aug, 2011
    Mia
    I just found out I defaulted on my student loans. I got a call from a collections ageny say my wages are going to be garnished. I have 4 children and make $12.00 an hour. How much money should I be expected to be garnished?
    0 Votes

    • 35x35
      Aug, 2011
      Bill
      Depends on the laws of your state. See the Bills.com resource Exemptions Laws by State to learn more about the laws in your state. Consult with a lawyer in your state to learn how the rules impact you. If you cannot afford a lawyer, call your county bar association and ask for the name of the organization that provides no-cost legal services for low- and no-income people in your area. Make an appointment with that organization, and bring all of the documents relating to the student loan (and your other debts) to your meeting. The lawyer you meet will advise you accordingly.
      0 Votes

  • 35x35
    Aug, 2011
    elizabeth
    I graduated from college 6 yrs ago but cannot find a job due to my age. I did not know when you pass your 35th b-day there are certain govt. jobs you are exempt from. I obtained a BSin Criminal Justice hoping to be a Juvenile Probation Officer. Now I have a loan over $50,000 and not adequate income to repay what should I do?
    0 Votes

    • 35x35
      Aug, 2011
      Bill
      Two family of my members earned bachelors degrees in justice studies, and neither work in law enforcement today. My point is, you have other options aside from the probation officer position you had in mind. For example, in some states your BS qualifies you to work as a paralegal, and in all states you more than qualify to work as a legal assistant. Also, insurance companies often seek people with justice degrees to investigate claims.
      0 Votes

  • 35x35
    Jun, 2011
    Nicole
    I'm a co-signer on my ex-boyfriend's student loan with Sallie Mae. To my understanding it is a private loan. Since it's currently in default and now gone to a collection agency, the agency has been contacting me about the loan. At this point, I tried for a Co-Maker Release, but Sallie Mae refused the settlement offer. Now the collection agency is saying that they can get the loan into a reduced interest program, but it would be on the full balance of the loan. What are my options at this point? I have my own personal student loans to pay. Can Sallie Mae garnish my wages for the co-signed student loan?
    0 Votes

    • 35x35
      Jun, 2011
      Bill
      Your options are limited. Yes, your wages could be garnished if you don't work out anything with the lender. Your situation illustrates, once again, the serious dangers of co-signing for someone.
      0 Votes

    • 35x35
      Jun, 2011
      Joe
      I live in PA and I have defaulted on Federal Student loans due to being out of work for 2+ years because of an injury. My wages are already being garnished for the federal loans, which is fine. It sucks, but I have learned to live with it. Now a collection agency is hounding me about a personal school loan I received through Sallie Mae and they are threatening to garnish my wages. I have 2 questions... 1) If they are successful, can they take 15% of my wages in addition to the 15% I am already paying (making the total I lose each check 30%)? 2) Do Sallie Mae loans fall under Statute of Limitations laws? It has been almost 6 years since I stopped going to school and I never made a payment to them. PA SOL is 4 yrs, so that time has passed. I am pretty sure the loan I got from them was called a signature loan, if that helps at all, and I do know I had to get a co-signer to get the loan. I am not sure if it is federally insured or not, but it never shows up on any paperwork I get from the Dep of Edu.
      0 Votes

    • 35x35
      Jun, 2011
      Bill
      Regarding your questions:
      1. You mentioned you reside in Pennsylvania. Please see the Bills.com resource Pennsylvania Collection Laws for a discussion of your rights and liabilities, including wage garnishment.
      2. A private student loan is treated like other consumer loans for the purposes of determining the statute of limitations. However, statute of limitations questions are tricky to analyze because the contract may contain a choice of laws clause that sets the statute of limitations not to the state of the borrower's residence, but to the lender's state, or even some other state. Review your contract with Sallie Mae to see if it contains a choice of laws clause. If it does, there is your answer to your statute of limitations question.
      3. Regarding any co-signer, see the Bills.com resource Sallie Mae Co-Signer Liability.

      Consult with a Pennsylvania lawyer to learn more about your rights.

      1 Votes

    • 35x35
      Jul, 2011
      Charles
      Bills, I have exactly $218 dollars left on NSLDS website, once this has been garnished will the garnishment stop on its own? Is there someone I need to contact? Can I be sure that this is the only balance that is needed?
      2 Votes

    • 35x35
      Jul, 2011
      Bill
      You can call or email the NSLDS, to get a balance statement.

      Also contact your employer's payroll department, to see if there is anything you need to provide them to have them cease garnishing your pay.
      1 Votes

  • 35x35
    Mar, 2011
    dzji
    Hi Bill...will you please inform me or let me know where to find information on federal student loan exemptions from seizures and garnishments? Specifically on life insurance beneficiaries and unemployment benefits in the state of Tennessee. I am currently unemployed due to being laid off and my grandmother is terminal with cancer. I am the beneficiary in her life insurance policy and want to find out if the policy benefits will be seize by the Dept of Education to repay my defaulted student loans. I have received wage garnishment notice, but my only income is unemployment benefits. Any clarifications or information I can study up will be greatly helpful.
    0 Votes

    • 35x35
      Mar, 2011
      Bill
      The Dept. of Education has the right to garnish wages administratively. That means it can do so without using your state's courts, like judgment creditors must do.

      I am not aware of any ability of the Dept. of Education to intercept an insurance benefit. (Readers, please correct me below.) However, the Dept. of Education may have the ability to levy your bank accounts. This is sometimes called freezing an account. Consult with a lawyer in your state who has experience in consumer law to learn your rights in Tennessee. Ask the Tennessee lawyer if keeping the insurance benefit in an account is safe, or if you need to cash the check upon receiving it.
      0 Votes

    • 35x35
      May, 2011
      Troy
      They CANNOT freeze your bank account for a federal student loan garnishment like an IRS tax lien. I learned this from a company I used a few months ago that was able to get my garnishment released.
      0 Votes

  • 35x35
    Feb, 2011
    william
    Bill, I have a Garnishment of 15% per paycheck. (around $262.00 a Check) however the government is ALSO taking my tax refund. I was suppose to get $6800 or so back but it is all taken. My thing here is IF they take my taxes are they going beyond the 15% mark?? If I was getting $6800 back it is like taking a additional $566.66 from me,(6800/12) each month for a total of $1090 which is more like 34-40% of my check. Also this Tax money is what I paid in BEFORE the Government decided to take wages.. its like them taking my savings out of my bank. Shouldn't I be able to keep the money that was paid in BEFORE this garnishment was started? Also as of date I still have not received any notice for garnishment. Help, Government is always slamming the Home loaners, Banks, and Credit card Company's for Gouging consumers however they are very very quiet about their student loans gouging Young and old adults alike and they charge crazy interest charges on top of this.. also have a Question isn't this unconstitutional and can it be constitutional challenged for taking of property without due process?? Thanks for your time William Helm
    0 Votes

    • 35x35
      Feb, 2011
      Bill
      I am not a constitutional law authority, so I can't answer your questions about takings. Instead, I am going to focus on the other issues you raised.

      The power to garnish your wages for a delinquent federal student loan is an administrative power. The Higher Education Act, (P.L 102-164; 20 U.S.C. § 1095a) authorizes the US Department of Education, as well as other student loan guaranty agencies, to collect on federal student loans that have gone into default through an administrative order to the employer. There is no need for a court order.

      A garnishment can be enforced against your wages, but is capped at 15% of your wages. Collection efforts also include the power to levy a bank account. The funds in your account, whether or not they are from wages you earned, are no longer wages. Once the money is in the account, it is subject to levy.

      Your tax refund is also subject to seizure for a delinquent student loan debt. It also is not viewed as wages. The only control you have in this area, is to adjust your withholding. This way, you get the $566 in your pocket, instead of overpaying on your taxes and then having the refund seized. If you change your withholding, make sure that you have enough withheld so that you don't owe the government when your taxes are due.
      0 Votes

  • 35x35
    Jan, 2011
    Terry
    I have a defaulted federally insured student loan and receive Social Security disability benefits, which are subject to Administrative Wage Garnishment. Monthly I receive about $950 before the garnishment, and about $850 after the garnishment. I multiplied 30 times the federal minimum wage, multiplied by 52 weeks, and divided by 12 months to calculate the monthly figure. 30 times the federal minimum wage per week works out to $942.50 monthly, yet my student loan garnishment leaves me with almost $100 less per month. What options do I have?
    0 Votes

    • 35x35
      Jan, 2011
      Bill
      You are quoting Title III, Consumer Credit Protection Act (15 USC §1671 et seq). Title III limits the amount of earnings that may be garnished in any workweek or pay period to the lesser of 25 percent of disposable earnings or the amount by which disposable earnings are greater than 30 times the federal minimum hourly wage. Title III permits a greater amount of an employee's wages to be garnished for child support, bankruptcy, or federal or state tax payments. "Disposable earnings" is the amount of earnings left after legally required deductions (e.g., federal, state and local taxes; Social Security; unemployment insurance; and state employee retirement systems) have been made. Deductions not required by law (e.g., union dues, health and life insurance, and charitable contributions) are not subtracted from gross earnings. According to the Dept. of Labor, if the pay period is weekly and disposable earnings are $217.50 ($7.25 × 30) or less, there can be no garnishment. If disposable earnings are more than $217.50 but less than $290.00 ($7.25 × 40), the amount above $217.50 can be garnished. A maximum of 25 percent can be garnished, if disposable income earnings are $290.00 or more. As you mentioned, amounts above ($217.50 X 52)/12 = $942.50 can be garnished. However, $942.50 is the floor below which nothing can be garnished.

      The Higher Education Act and the Debt Collection Improvement Act of 1996, at 31 U.S.C. 3720D grants the Dept. of Education the ability to administratively order employers employing individuals who have defaulted on the repayment of a student loan to deduct 15% of the borrower's disposable pay per pay period. The question becomes, is the Dept. of Education subject to 15 USC §1671 et seq? Yes it is, according to the Dept. of Education.

      If so, what can you do about an excessive amount garnished from your Social Security benefit or wages? Contact the Dept. of Education Administrative Wage Garnishment Branch at (404) 562-6013 and request a hearing.

      One additional thought. You mentioned you receive Social Security disability benefits. If you are unable to work permanently, you may be able to get your federal student loans canceled. See the Dept. of Education document Loan Cancellation & Discharge to learn how.
      0 Votes

  • 35x35
    Nov, 2010
    I have a student loan that is over 21 years old I never received a certificate for the course because the school closed down now they are garnishing my check. Is legal?
    1 Votes

    • 35x35
      Nov, 2010
      Bill
      If your student loan is federal, then it will be discharged if the school closed before you could finish your degree. See the Dept. of Education Web page Discharge/Cancellation. If your loan is private, then you have no recourse unless the repayment causes undue hardship. Consult with an attorney who has experience in bankruptcy to learn if bankruptcy will provide you relief.
      1 Votes

  • 35x35
    Oct, 2010
    Bill
    See the Bills.com resource Federal Student Loan Garnishment to see my recent answer to question similar to yours.
    0 Votes

  • 35x35
    Oct, 2010
    steve
    I was making payments once a month for my student loan and unknown to me the agreement somehow ran out and now the Feds want to garnish 15% of my income.I only make $800.00 a month as it is and now it seems their trying to squeeze me for more.I have contacted the student loan people and even went up to the supervisor but they wont budge on garnishing my wages.Is there any other means to fight this?
    0 Votes

  • 35x35
    Oct, 2010
    Bill
    Depends on how vigorous and aggressive the judgment-creditor is in pursuing you, and on the laws of your state.
    0 Votes

  • 35x35
    Oct, 2010
    Joseph
    How long do i have before my wages start being garnished? Last time i was working it took 6 months before my wages started to be garnished.
    1 Votes

  • 35x35
    Aug, 2010
    Bill
    Yes you can! Contact the creditor or the law firm that represents the creditor to discuss a lump-sum settlement of the debt. The creditor/law firm might be willing to take 50-60 cents on the dollar today as opposed to continuing to receive a small amount over time, especially because the job market is so turbulent and there is no guarantee you will be employed a year from now.
    1 Votes

  • 35x35
    Aug, 2010
    Sara
    Hi Bill, I realize this Q&A topic is a bit old, but hoping that you might still see this! My question regarding wage garnishment is fairly simple...15% of my pay is being garnished...if I am willing to pay this amount voluntarily, can I stop the garnishment? Thanks for your assistance.
    0 Votes

  • 35x35
    Mar, 2010
    Bill
    See the Bills.com resource Federal Student Loan Garnishment to see my recent answer to question similar to yours.
    0 Votes

  • 35x35
    Mar, 2010
    Latrice
    My wages have been garnished for about a year now for defaulted student loans. How long will this continue before I can negotiate a lower amount. I currently pay $340 per month which causes me to live EXTREMELY tight.
    0 Votes

  • 35x35
    Feb, 2010
    Bill
    As a general rule, I do not contradict or offer observations to readers who have consulted with an attorney. Your attorney has had an opportunity to review your situation in detail, ask you questions, review your documents in person, and can apply your state's laws to the issues in question. For me to offer contradictory advice based on the scant information I have would be folly.
    0 Votes

  • 35x35
    Feb, 2010
    ray
    I have a wage ganishment and am filing chapter7 my lawyer informed me that my garnisment would stop during the filing period but when the discharge is complete they will start the process again unless i make arraingments is this informantion accurate
    0 Votes

  • 35x35
    Feb, 2010
    Bill
    As mentioned above, Congress has given the Dept. of Education the right to garnish federal tax returns. However, my research has not revealed the Dept. of Education's policy on the exact circumstances under which it will garnish tax returns. I invite readers who know the policy to state it below.
    1 Votes

  • 35x35
    Feb, 2010
    jorge
    hi i am currently having my wages garnished for default student loans. in the past it seemed if my wages were being garnished then i would recieve my tax return, and vice versa, if i wasnt being garnished then my tax refund would be offset. is this part of the policy? im asking because i want to know if i will be receiving this years return. thank you.
    0 Votes

  • 35x35
    Feb, 2010
    Bill
    Go to the National Student Loan Data System for Students and retrieve the current status on your federal student loans. See also the Dept. of Education's Contacting Collections page.
    0 Votes

  • 35x35
    Feb, 2010
    Scott
    How do i know what loan my tax return is applied to? For the past 3 years, my return has gone to my student loans, but i dont see it on any of them.
    0 Votes

  • 35x35
    Feb, 2010
    Bart
    There is a way to check the status on your tax return: US TREASURY's TAX OFFSET PHONE NUMBER---> 800-304-3107
    0 Votes

  • 35x35
    Dec, 2009
    Lissa
    Thanks. I just owe a little over 6 thousand and I want to pay them off as soon as possible. Even if that means paying with my taxes.
    1 Votes

  • 35x35
    Dec, 2009
    Bill
    It is possible that the your tax return can be garnished to pay your student loans. I cannot say for certain whether they will garnish your taxes. I recommend you contact your student lender or the Department of Education's resource Facing loan default Web page to learn more.
    0 Votes

  • 35x35
    Dec, 2009
    Lissa
    If my wages are getting garnished to pay for my loans. Will they still take my federal tax return?
    0 Votes

  • 35x35
    Dec, 2009
    Bill
    I think your first question is rhetorical: I cannot explain Congress' reasoning behind the garnishment rules for collecting on delinquent student loans. Regarding your second question, I surmise you are asking if the creditor is required to send the debtor periodic statements regarding the account status. I am not aware of any such requirement. I suggest you contact the creditor and ask for a statement of your account.
    0 Votes

  • 35x35
    Dec, 2009
    Matthew
    I am more than happy to pay 15% of my disposable income but have seen recently that it is more than that amount why would that be? Also for taxes should I be getting something to show how much has been paid for in interest?
    0 Votes

  • 35x35
    Dec, 2009
    Bill
    If you want your garnishment modified you should resubmit the paperwork as many times as it takes. See my answer to Sheila above dated 9/24/2009 for more details.
    0 Votes

  • 35x35
    Dec, 2009
    Frank
    My wages are currentlt being garnished at $257 on a bi weekly basis. I contacted the lender ( federal student Loan)prior to the garnishment. I submitted the requested paper work, but the worker never contacted me, still to tghis day I have had no contact. I called and spoke to another representative who tells me that I have to make $325 monthly payments for 9 months on top of the garnishment in order to bring dowm my payments. If not the garnishment goes on forever, is there anything I can do at this point?, I was told to submitt all the paperwork again but If I did it before with no response what will be the point? is there any other legal resouce that I can do, thanks.
    3 Votes

  • 35x35
    Sep, 2009
    Bill
    If the debt is federal, then the government has the right to garnish wages or withhold your tax return without a hearing. See Repaying Student Loans Held by the U.S. Department of Education and Common Disputes Involving Defaulted Student Loans to learn more about the rules surrounding collections on federal student loans. According to the second URL I mentioned, "A debtor who claims that he or she cannot afford to repay a particular installment amount bears the burden of proving that the amount exceeds what he or she can afford based on his or her total financial circumstances, and that some lesser installment amount can be repaid. To do so, the debtor must provide a complete statement showing the income and expenses of the debtor and his or her household members."
    0 Votes

  • 35x35
    Sep, 2009
    SHEILA
    stsudent laon is garnishing 15% of my pay (203.50) per pay period which willc ause a financial hardhsip. is there anythign I cna do?
    0 Votes

  • 35x35
    Jun, 2009
    Mark
    Cherie, the attorney representing the creditor who is receiving your wage garnishment will have the information regarding your account. To learn more about wage garnishments in student loans, see this Bills.com blog entry: http://www.bills.com/garnishments-due-to-defaulted-student-loans/
    0 Votes

  • 35x35
    Jun, 2009
    Cherie
    If your wages are garnished for student loans, are they required to provide for you any statements informing you of what has been paid and what is left outstanding. I had my wages garnished approx 3 years ago and have yet to get even ONE statement as to what has been paid to date and what is outstanding, what fees I have paid, interest, who the payments have been made to etc. They have also never reported to the credit agencies that even one penny has been paid to date and this has been hurting my credit. What rights do I have to force them to provide me this information and to report to the credit companies that payments have been made? I actually am over being mad about them garnishing my check because I figure this will only get it paid off sooner, however the student loan company actually contacted me about getting payments, so now I am wondering WHO is actually getting the payments. Thanks
    5 Votes

  • 35x35
    Jan, 2009
    Bill
    The only thing I can suggest is to continue to argue your case with the lender. Provide them with as much as information as you can (paychecks, budget etc.). Once you make a compelling case, they might agree for the amount you can afford. This is a difficult situation as student loans are different from other forms of debt, as they are backed by the Government in case of default, and one cannot include them in a bankruptcy even. That's why you will find that the lenders are not flexible.
    0 Votes

  • 35x35
    Jan, 2009
    Kristen
    Hey I have students loans that are in default. They gave me a 260 payment plan I can not afford it. I tried to set it up where i would only pay 150 but they are saying no to me. I wanna make the payments but i can not afford it. And I know that there has got to another way. if i make those payment im not going to be able to pay something else or i wont be able to eat. if i had that kind off money i would have been payed it off.
    0 Votes

  • 35x35
    Nov, 2008
    Nithin
    You should have checked for a refund policy before you signed up. You will have to work with the school to maybe get a prorated refund. If thats not a possibility why not just finish the course.
    0 Votes

    • 35x35
      Jan, 2011
      demetrio
      if that school you went too is closed or changed name, you don't need to pay the loan back, otherwise you default, a federal loan company buys it, if you ignore it they garnish wages 15% AFTER TAX, i've been there, also your loan is not subject to the 7yr credit statutory period and in fact cannot be added to any bankruptcy chapters, yikes!!! pay it back before they repo your car or place a lien on your home!!!
      0 Votes

  • 35x35
    Nov, 2008
    Ruby
    Hi, My question is I went to this vocational school for only 2-3 months. I don't feel that I should have to pay the full amount since I didn't finish the course. What can I do?
    0 Votes