Student loan garnishments deduct a smaller amount of money from a worker's wages than garnishments to recoup payments for back taxes or child support. People who have delinquent student loans receive advance notice of a garnishment order, as do all others who face garnishment. Therefore, they should take advantage of the opportunity to prevent a garnishment by responding to the notice.
Higher Education Act
The Higher Education Act allows the U.S. Department of Education to garnish 15 percent of a borrower's wages to repay a delinquent student loan. The department can require an employer to deduct that percentage from the borrower's wages each pay period until the borrower pays off the loan. Nonetheless, the department notes in its information on recouping overdue loans that wage garnishment is only used against borrowers who refuse to voluntarily repay their delinquent student loans.
Process
The Department of Education notifies borrower's 30 days before ordering a wage garnishment. Some types of wage garnishments require a court order, but that's not the case with a student loan. The garnishment notice that a borrower receives from the department shows the amount of the debt. It also offers the borrower the chance to review documents the department has that relate to the debt. Borrowers can make copies of those documents for their records, which may be particularly important for people who want to dispute a debt.
Disputing Garnishments
You can request a hearing with the Department of Education to object to a garnishment if you disagree with the amount the department claims you owe. Borrowers who feel they can't afford to lose 15 percent of their wages in a garnishment can request a hearing as well. Borrowers must demonstrate at a hearing that a garnishment would cause them serious financial harm. They can present bills and other documents that show they would be unable to pay for rent, food or other necessities. Nonetheless, it's up to the department to decide if a borrower is unable to afford a garnishment.
Other Terms
People who receive a student loan garnishment notice can avoid the garnishment by making a payment agreement with the Department of Education, but the department decides the terms of the agreement. Employers can't fire borrowers who have their wages garnished to repay a student loan, and companies can't refuse to employ someone due to a garnishment. No information about the borrower's financial situation is part of the garnishment order that an employer receives beyond what's necessary to begin the garnishment, according to the department.
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