Student Loans and Wage Garnishment FAQ

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If I default on a student loan and I am working, does the Department of Education have legal authority to garnish my wages?

Yup. And not only the Department of Education but also the agencies that guarantee your loans. They have the right to from 10% - 15% of your wages.

I thought I had to be sued and get a court judgment in order for my wages to be garnished.

That is true of all loans except student loans. If one defaults on any other kind of loan, your creditors must get a court judgment against you, after which they can garnish up to 25% of your wages.

Will I know in advance if my wages are going to be garnished?

You will be notified beforehand. The Department of Education is obliged to let you know in writing 30 days before the garnishment date. It must tell you how much you owe, how you may enter into a repayment schedule so your wages are not garnished, and how you can obtain a hearing on this garnishment process to try to stop it.

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How long do I have to respond to this letter?

You have about 15 days to respond, and your response must be in writing.

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If the Department of Education is going to garnish my wages, at what point will it let my employer know?

The Department of Education will let your employer know it’s going to garnish your wages about 20 business days after you receive its notice. It assumes you will receive the notice by five business days after the date they mailed it.

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If I have just started a new job after not working for the past year, can my wages be garnished?

Yes. However, if you were fired or laid off and didn't return to work for a full year, you can object to this garnishment and you may win.

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I barely earn enough to live on now. How can my wages be garnished?

If you don’t earn at least 30 times the federal minimum wage per week, your wages can't be garnished.

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How many days can I be in default before my wages can be garnished?

You can be in default about 225 days before your wages can be garnished.

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I have been in default for some time, and I seem to have slipped through the cracks. When is the statute of limitations up?

Unfortunately, never. If you haven’t paid your student loan, you remain responsible for it and for any interest on it, too.

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If I default and the Department of Education comes after me, what can they get?

Almost everything: your bank account, your car, and any other property and/or assets you own—as well as garnishing your wages.

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If I am being harassed by a collection agency because I’m in default on a student loan, what should I do?

Call the Deputy Director of Debt Collections at (202) 708-4766. If the harassment continues, contact the Policy Development Division, Loan Branch of the U.S. Department of Education at (202) 708-8242.


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